With the threat of a $1 billion deficit looming over the state’s next budget, the four candidates for governor are staking out their position. Only one of them, Republican Peter Cianchette, has stood up squarely for the beleaguered, overtaxed people of our fair state. With his recent pledge that he will never support any tax increase, Cianchette has signaled clearly to our citizens that help is on the way.
Taxes in Maine are hardly too low. The problem is that state spending has exploded absurdly over the past decade. Our current state budget is $1.2 billion a year more than it was in 1992. That’s an 80 percent increase in ten years, more than three times faster than inflation.
Like other shortsighted states that spent with wild abandon during the boom times of the 1990s, the Maine Legislature ramped up new spending and new programs as though the boom would last forever. Avoiding the hard choices, the Legislature tried to create a government that was all things to all people. Now that the boom is over, we find ourselves saddled with a state government we can no longer afford.
A $1 billion shortfall represents about 20 percent of the total General Fund budget for the next biennium. Raising taxes to cover such a massive deficit is out of the question (although the idea of reforming taxes has merit). Mainers already are the most highly taxed people in the country, and are increasingly resentful about it. Some $128 of every $1,000 of income goes to state and local coffers.
Our reputation as a high-tax, heavily regulated state has already caused us substantial economic harm. Companies looking for a home base or an expansion site have numerous options. Why locate in the country’s number-one tax state?
Meanwhile, our eroding industrial base – 7,000 manufacturing jobs lost last year – places greater strain on the businesses and residents that remain. Without a flourishing business community to create good jobs, Maine’s per capita income is roughly 35 percent lower than that of our neighbors in New England. A quarter of our young, productive workers must leave Maine to find work.
Raising taxes even higher would further erode our competitive position and hasten our slide into economic stagnation. Higher taxes would scare away the investment and job creation we so desperately need.
There’s only one logical way out of this budget fiasco. We absolutely must bring state spending under control. We have no choice.
Next we must implement LD 2193, An Act to Create the Office of Program Evaluation and Government Accountability, authored by me and state Reps. David Trahan of Waldoboro and Matt Dunlap of Old Town and passed by the 120th Legislature. Maine has gone a decade without the legislature having a method to do any independent review, evaluation or audit of programs run by state agencies. Controlling spending and evaluating existing programs to measure the outcomes has to be the basis for correcting our tax structure.
Cianchette has the right idea. He would cap state spending at 75 percent of Maine’s personal income growth. If Maine’s personal income grows by 4 percent, for example, a Cianchette budget would be limited to 3 percent growth.
If only we’d had such a cost-containment cap in place since 1992, it would have saved taxpayers $2.4 billion. Our budget would be balanced. Our economic vitality would be enhanced. Taxes could be cut. In fact, if we had merely held state spending to the inflation rate, we would have saved $3.1 billion over the past 10 years. Think what a relief that would be for the many Mainers who increasingly find themselves under financial stress.
Cianchette has the right stuff to stand up to the big spenders and bring state spending back under control. We also can trust him to gradually bring our tax burden back in line with the rest of the country. Once we stabilize our economic situation, we might consider a constitutional amendment to limit General Fund spending, based on a formula that accounts for inflation and population growth.
We must take bold steps to get Maine’s economy moving again. Without a strong economy, we will be hard pressed to afford excellent schools, affordable health care, a clean environment, a better transportation network, and all the other things that make Maine special.
Ed Youngblood, a Republican from Brewer, is the state senator from District 6.
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