Budgets of old

The state budget approved overwhelmingly Thursday by the Senate may have been a fair attempt to reconcile endless legislative demands with limited resources, but the result sets up Maine to repeat the economic chaos of the early 1990s. To largely deplete the state’s savings account, to add programs above what the Appropriations Committee unanimously concluded Maine could afford then to cut off new sources of revenue to pay for them in the future was short-sighted. It is up to House leadership to point to a more positive direction.

The Senate bill was the product not of public debate but of two men, who could well be seeking higher office against each other. Democratic Senate President Michael Michaud may want to claim he protected programs; Republican President Pro Tem Rick Bennett may want to claim he fought against higher taxes. Both may want to be the next congressman from Maine’s 2nd District. But by spending one-time savings on ongoing programs they are greatly increasing the risk that in two years, when they are gone from the Legislature, Maine would face larger shortfalls on programs requiring further cuts all around.

And by stripping $110 million of the state’s $145 million Rainy Day Fund they would guarantee Maine would face this challenge without the money to help pay for it. That made the Senate’s vote disappointingly similar to legislative action a decade ago. At the end of fiscal year ’89, Maine had $25 million in its Rainy Day account; by the end of fiscal year ’90, it was $3.9 million; at the end of ’91, it was $82,000. Maine went into and stayed in an economically jolting recession for the next five years and it is clear to this day that it has not fully recovered. Certainly the absence of the Rainy Day account didn’t change the depth of the recession, but is was equally clear that lawmakers then thought they could finesse their way through tough times rather than face them honestly. Maine must not make that mistake again.

Why an overwhelming number of senators went along with a budget is a mystery. The best conclusion the public might draw is that they simply didn’t know what they were voting for. For instance, if Democrats thought they were saving their beloved state liquor stores, they were wrong. Instead of closing them this year, they voted to find a way to close them next year. Or if they thought they were helping state union workers, the King administration reports that the money set aside for raises under the collective bargaining was spent Thursday in the Senate budget. And if individual lawmakers like Sen. Lynn Bromley of Cumberland thought she helped her local school district of South Portland, which will lose substantially under the current funding formula, she would be wrong, according to the Department of Education. The added $1 million in school funding in the budget she voted for excludes districts with the kind of fiscal capacity found in South Portland. The new money, however, will make it to places like Medway, in President Michaud’s district.

And that’s what this late-night budget look like – a collection of small favors tossed together to build support. If it is, Democrats didn’t negotiate well. They got $10 million or $15 million in programs but gave up $65 million in taxes and, more importantly, risked control of the debate if it goes beyond the deadline for simple-majority vote, on Saturday. Conversely in the House, Democratic Speaker Michael Saxl had rallied Democrats, persuaded them to give up programs they wanted in favor of fiscal conservatism and got the bipartisan Appropriations budget passed.

Senate leaders will be quick to point out that they have put $50 million back into the Rainy Day Fund by including the governor’s technology endowment, although the interest from that endowment would still go to technology. It is sleight of hand again reminiscent of the gimmicks of the early ’90s.

Worse, the extremely safe securities allowed as investments for the Rainy Day guarantee the endowment will not earn enough to pay for the technology programs lawmakers themselves envisioned. Worse still, by shifting $5 million out of the Maine School and Libraries Network to fill in a hole the Senate budget created in the endowment fund, it ensures that the school-technology wiring project also will not be completed. Worst of all, tinkering with education money virtually guarantees there will be no money to add to General Purpose Aid to Education next year. The budget line now stands at a paltry 2.5 percent, meaning the actual increase in operating money for schools in 2002 is near zero. Senate Democrats and Republicans – with the notable exception of those on the Appropriations Committee – are cheering about this.

The Legislature can slow down and reconsider the costs it will be leaving to future lawmakers and to taxpayers. It can do so with respect for political differences but without the acrimony that arose Friday or the kind of politics that led Maine into the recession of the early 1990s.