CLOSING THE GAP

The presence of more than $100 million in the state’s Rainy Day account, even if most of that money already has been committed to programs starting July 1, means that Maine has enough time to make thoughtful decisions about closing a $180 million shortfall in the current biennium. Maine has enough time, that is, if its political leaders don’t waste a lot of effort figuring out how this problem can be turned to their political advantage.

The $180 million isn’t firm – it might be $200 million or $160 million; the state’s revenue forecasters might decide the worst of the capital-gains losses are over – but whatever the precise number is, lawmakers are for the first time in several years seeing Maine’s revenues without the stock-market bubble. They are seeing what this state, with its already high tax burden, can and cannot afford. You might think of Maine as having won big at a casino a few years ago. Unfortunately, it began acting as if its winnings were part of its regular wages. Now the winnings are gone, and while everyone may hope they come back, no one should plan as if they will.

How well the King administration and the Legislature make the needed changes to the state budget depends, certainly, on their financial skills and their ability to set priorities for taxation and spending. But at least as important is their ability to work together. The shortfall is a nasty shock, but it is also a chance to make structural changes for spending levels that can be maintained and tax levels that reflect something more than which industry lobby was the latest to catch lawmakers’ attention. Another benefit: Ongoing savings achieved in fiscal year 2003 carry into savings in 2004, which already has an expected budget gap of $500 million.

The Maine budget regularly has shortfalls, which are often made up by economic growth or small adjustments in spending. This one is different because it occurred partly in a fiscal year that is almost over, leaving no time for growth, and it arrived just before the Legislature adjourned from a session of cuts, leaving few easy choices to balance the books. The best that can be done immediately was already proposed by the governor: spend the Rainy Day money scheduled to be spent next year on bills due for this year, then take the next couple of months to plan cuts for next year that account for the total shortfall.

As former Gov. John McKernan made clear over the weekend, this situation is easy to second-guess. Gov. King should have contacted lawmakers sooner. The Legislature itself should reconvene the Appropriations Committee to begin looking at program delays or outright elimination. Waiting may change the details in the shortfall, but it won’t change the general message, which is that Maine cannot afford its current budget. If legislative leadership determines the best way to solve this problem is through substantial changes in the budget, it should then bring in the full House and Senate.

The desire by the governor to avoid the legislative free-for-all that can come from such a session is understandable, but the alternative is to leave a plan that will be targeted immediately when the next legislature meets in January, serving neither the budget nor Maine well. Senate President Rick Bennett has a term left, but otherwise term limits this year will at least temporarily end the careers of Gov. King, House Speaker Mike Saxl, Senate President Pro Tem Michael Michaud and Appropriations Committee Chairmen Sen. Jill Goldthwait and Rep. Randall Berry. There would be scant defense for an agreement few participated in.

If closing the budget hole is going to amount to anything more than quick patch job, a full debate of the Legislature is ultimately required.