November 26, 2024
Editorial

Before the Panic

The expected gap between revenue and spending may change some between now and January when the Legislature starts working on Maine’s next budget, but it won’t change enough to erase the roughly $650 million to $750 million shortfall currently expected. Now is not too soon for lawmakers to offer the public ideas that will help the state meet its obligations in the coming fiscal year.

Legislators may go back into session before January to deal with a more immediate problem, the $200 million or so current shortfall and to vote on Gov. King’s proposal for reconciling it. It has some difficult choices to make, and it is likely that by the time lawmakers return to Augusta, the current shortfall will be even higher. That suggests that making cuts in ongoing programs and canceling, rather than delaying, conformity with the federal budget cuts are in order.

Maine is not alone in its budget problems, now or expected for next year. In the short term, Massachusetts is looking at even more tax increases to cover costs, is draining a substantial part of its Rainy Day fund and still has to find millions of dollars more in savings. Arizona has used so many gimmicks to make its budget balance that the courts are looking at the legality of the deal. Minnesota used reserves, accounting shifts, refinancing and spending cuts to cover a $3.2 billion current shortfall. Nationwide, 40 states have been forced to close budget gaps this summer. It may not make Maine feel any better, but these states are using the same desperate style of budgeting as the King administration.

But counting on furlough days or cuts in revenue sharing to municipalities are not adequate answers for the upcoming budget. The state’s Revenue Forecasting Committee will use new revenue projections for fiscal years ’04-’05 when it meets in November, and the state will have a better sense then of the challenge it faces. (The committee also will meet at the end of summer and offer a projection without new numbers; this is an exercise required by politicians to give them something to use in the upcoming election and are of limited use otherwise.)

Before then, lawmakers need to start trying out ideas for revenue and spending changes. Maine doesn’t need suggestions of across-the-board program cuts or across-the-board tax increases. It has eight or nine months to put together a thoughtful, incremental package of changes that, if done right, will both close the gap and better prepare the state for shortfalls of the future.

So lawmakers – and the public – should bring out their productivity plans and their ideas for merging agencies. They need to air their thoughts on health-care and education costs. Legislators have complained for years that Maine pays millions annually for sprawl. Now is a good time to stop. They have complained about the volatility of the tax system. Now is a good time to dampen it. Maine’s tax burden is well known; less recognized are the services, regularly ranked tops nationally for quality, those taxes buy. Which ones would lawmakers cut? Head Start? Health care for children (let’s hope Congress comes through with the proposed expanded Medicaid benefits)? More cuts to higher education?

These difficult choices require a level of innovation the Legislature usually despises. Bringing out plans early, before the crisis of the legislative session, gives the recalcitrant time to think about the new ideas and their alternatives. It also leaves more time for panic once the session begins.


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