Bridging the gap

The two budget proposals that have split the Legislature are overwhelmingly alike in all but two areas. The Senate budget relies on one-time funds for ongoing programs to leave the next cycle of lawmakers with a budget gap of between $140 million and $165 million; the House relies on taxes on meals and cigarettes to keep its gap at between $65 million and $90 million. And the budget approved by the House went through the normal public process of the Appropriations Committee, while the Senate version simply appeared after the two political parties agreed on it.

The resulting dispute, particularly as the Senate’s versions have targeted the Rainy Day Fund and the Technology Fund, has created intense lobbying in the State House, plenty of ill will and a hefty amount of stubbornness. All of which risks lawmakers producing a budget based more on animosity than on fiscal responsibility.

Because the major policy disagreement is over one-time spending and because the public will pay for whatever lawmakers eventually decide on, House and Senate leaders should be willing to hold hearings and negotiate an acceptable level for the next structural gap that they are willing to leave. The ideal level, of course, would be zero.

Lawmakers will point out that previous state budgets had structural gaps larger than either of the proposed Senate or the house versions, and they would be right – the last budget had a gap somewhere around $200 million. The last budget, however, also came when state economists were predicting revenue growth at 10 percent and were too conservative. Growth in the next couple of years is likely to bump along between 4 percent and 5 percent.

Maine might grow enough to absorb a $150 million gap or it might, given the state’s large role in health care and health care’s double digit inflation rate, have trouble in the next biennium simply delivering current services. None of this counts the state’s Part II budget, which could add another $50 million or $100 million to the gap. A public hearing outlining the level of risk Maine should be willing to assume would be instructive and useful in closing the divide between legislative houses.

The proper place for this debate to take place is before the Appropriations Committee. That will not be an easy place for some state senators, but returning there would help get the budget focused again on fiscal policy and off the campaign-style budgeting that has filled Augusta for the last two weeks.