Setting the right priorities for Maine

Recent surpluses have promoted unhealthy spending policies that have come home to roost in Maine. Two years ago the Legislature had the “problem” of allocating $300 million in surplus money. Now we must overcome a $250 million deficit. On Tuesday, Gov. Angus King released his plan to make up for that shortfall by using most of the state’s Rainy Day Fund while curtailing other programs. He also suggested delaying some hard-fought reductions in your tax burden by previous Legislatures.

My priority is ensuring that this budget not be balanced by reducing General Purpose Aid to local education or by delaying tax cuts – both of which would increase Maine’s already substantial tax burden.

There are many competing views on what programs should be cut or scaled back, but this shortfall is a symptom of a larger problem: State government spending is rising faster than our taxpayers’ income. It is essential that we set priorities and see them through. We have not done a good job of that in the past.

Since 1996, the state’s two-year spending has increased from $3.4 billion to $5.3 billion. We cannot allow the growth of government to outpace the growth of personal income. The most recent data confirms that we have the highest tax burden in the country, and the continuing rise in Maine’s tax burden last year is of particular concern because it happened while all the other top-five taxed states were reducing their tax burdens. Our state remains one of the least enticing places to start a business. The 8.5 percent income tax rate is undoubtedly one of the culprits – New Hampshire doesn’t collect income tax and Massachusetts recently reduced their income tax to 5 percent

Clearly, we need to improve our business climate and reduce our tax burden. All of our fiscal woes are rooted in the vulnerability of our economy. It is time that all leaders in our state – political, business and civic – turn our attention to this question of economic sustainability. Our future is at stake.

One need look no farther than our neighboring New Hampshire to stare reality in the face. Consider the information in the accompanying chart.

These figures indicate some disturbing trends. First, we must stop the mass exodus of our talented young people to neighboring states. Demographically already the fourth oldest state, Maine is graying faster than other states. A sizable portion of the population ages 18-40 have left the state over the past decade and the proportion of our elderly population will increase by 50 percent in the next 20 years. Meanwhile, our birth rates are the lowest in the nation.

Another disturbing trend: Maine’s population increased by only 3.8% during the 1990s. In northern Maine, however, that tiny increase would be welcome compared to the massive outward migration that region experienced. Aroostook County lost 13,000 people – an extraordinary 15 percent of its population. We are beyond the crossroads here – it is now a full-blown crisis. Without changes that make rural Maine more attractive to entrepreneurs and businesses, this treasured way of life may be gone forever.

As Maine’s population grows older, it is more important than ever that we fashion policies to keep the creative energies of our young people working for Maine’s future. R&D investment – public and private – must be increased to $1,000 per person while we strive to attain a 30 percent college educated population. Studies show that if we keep our students in Maine to attend college, they are more likely to stay and pursue opportunities here when they graduate -building businesses, starting families and growing our economy. One of the axioms of the New Economy is that a pool of talented people is the irreplaceable asset for business prosperity.

So we have a clear challenge: We must act to make Maine a more attractive place for young people as well as retirees by creating an environment that fosters business and economic development. While the challenges are great, we have some things going for us. Maine is a state recognized nationally as among the best places to start a family and raise children. Geographically, it is hard to think of a more blessed location. We must leverage those assets to the benefit of the Maine people. We need to weave together education – particularly higher education – sustained research and development investments, infrastructure improvements, international trade concerns and sensible state policies on taxing and spending.

But it is not a challenge for state government alone. It is a challenge for all of us. Our communities, our neighborhoods, our families depend on it.

Richard Bennett is president of the Maine Senate.