Lessons from the storm

Lessons from the storm

Much has been made of Gov. Angus King’s speaking abilities; at his State of the State speech Monday, he also demonstrated a capacity to listen. The governor has heard the economic disparity tearing at the fabric of Maine and energetically pledged to mend it. His speech raised expectations, and this half of the state especially awaits the details of his strategy.

Nothing is more important to the future health of the state than solving the rift between the two Maines. Monday night, the governor deftly offered the neighborliness found during the recent ice storm as evidence that Maine is, at heart, a single place. But metaphors don’t pay the rent. Gov. King presented several encouraging ideas, packaged in what he called OneMaine, and in the coming months needs to present more specifics.

His support for expanding Maine’s capacity for research and technology should translate into his backing a significant increase in research dollars for the University of Maine System. A legislative committee recommends an added $10 million to the system’s base funding for research and a $13.5 million bond. That’s a nice start. But if the governor is serious about research and using the university system as an engine for growth of top-quality jobs, those numbers should be doubled. The payback through increased income and sales taxes alone make such an expansion logical and affordable.

Government doesn’t get much more basic than when it builds roads. The governor’s advocacy for improved routes Down East was a welcome sign that he understands the conditions that residents and businesses in that region have had to endure. His passing mention of the East-West Highway, however, was disappointing because he did little to clarify his stance on the issue. He called it an idea for the long term, which its most ardent supporters acknowledge and its detractors assume. How long term and when do we start?

A novel and generous idea presented by the governor would dedicate for rural development the approximately $600,000 generated annually by property taxes from the planned natural-gas pipeline. The money is more than needed and the pipeline is as good a place as any to get it. Only a cynic would see this as a financial inducement to ease the local approval of siting the pipeline.

Gov. King accurately observed that the problem of the two Maines has been around for decades and cannot be mended in a year or two. What makes addressing the problem important now is that even as the state runs a surplus and parts of Maine are enjoying economic prosperity, other regions continue to lose jobs and people. The sense is that some sections of the poorer Maine are approaching a critical point, after which businesses, schools and community services there no longer can be supported.

Promises to keep

In the area of tax cuts, the governor had an interesting problem. Should he uphold the promise of a previous legislature to knock a penny off the sales tax or uphold the promise of his own gubernatorial campaign, when he observed that, “The biggest problem with our system is that it depends too much on the property tax.” He chose the latter for three excellent reasons.

It is affordable. The ongoing annual budget surplus is approximately $80 million. A penny off the sales tax would cost $120 million. His proposal of a $7,500 homestead exemption for primary residences would cost $45 million.

It allows Maine to make an overdue correction in its income tax. Under his proposal, Maine personal exemption would be moved up to the federal level, an increase of $450. Nearly a decade ago, the state and federal exemptions were about even, but Maine’s mechanism for measuring inflation is faulty, so residents have been denied an exemption they deserve. That mechanism should be fixed, too.

It keeps the savings in state. Nearly $20 million of the of the GOP’s proposed sales-tax cut would go to visitors from out of state. All of the savings in the governor’s proposal, which reflects the position taken by Democrats, would stay in Maine. The annual difference for a family making $38,000 a year, according to the governor’s numbers, is $120 in savings from the sales-tax cut compared with $220 in savings from his proposal.

The tax cuts are the happy result of a stronger national economy and good times in some parts of Maine. Unfortunately, not all towns share in that prosperity. But if the governor can match the OneMaine proposals with action, the final year of his first term could be lively and more productive for all of Maine.