CLOSING THE GAP

With the shortfall in the current budget rising and deadlines for printing tax forms and making tax disbursements fast approaching, the Legislature no longer can put politics ahead of policy. It should meet directly after the election, either immediately offer an alternative to the governor’s BETR proposal or accept his plan and not put off final decisions until January.

What happens next is up to leadership. The top Republican and Democratic members have circled each other for months, been distracted by the election and generally hoped the shortfall would turn out to provide them with a political advantage. It has not, and now, as made clear on Saturday’s Op-Ed Page by the co-chairmen of the Appropriations Committee, Sen. Jill Goldthwait and Rep. Randall Berry, time is running out.

That means it is also running out for next year. Consider this: Lawmakers will face a $1 billion or more shortfall, a pressing demand for tax reform, an overdue requirement to build a coherent state health-care policy and a slate of promises from a new governor. Any one of those four could take experienced lawmakers the better part of a session to solve. Getting to work on all four with new lawmakers is a monumental task; asking them to also solve the current shortfall is another way of saying, “Maine surrenders.”

The current disagreement is over the governor’s planned delay of funding for the Business Equipment Tax Rebate. Businesses, understandably, don’t like this idea. But rather than just protest it, they need to negotiate. Lawmakers would be strategically unwise to remove the tax entirely outside a comprehensive reform of taxation – that would merely remove an interest by, say, the Chamber of Commerce to participate in the overall reform. But a phase-down – over four or five years, reductions by 50 percent or 60 percent of the tax – in exchange for the refund delay now might give all sides something to be happy about, and such a plan could maintain the option to drop the tax entirely in a larger reform. In any event, the BETR delay is worth $47 million. Tack on another $30 million from the new forecast and lawmakers have, once again, a large problem and few options.

Legislative leaders are scheduled to meet Nov. 7 to resume work on the budget; they have but a day or so to debate and need to present a unanimous report to the full Legislature next week. This is not a matter of rubber-stamping what the governor has offered – a less painful alternative would be welcome – but of recognizing the seriousness of the situation Maine is in and the squandered time that could have been used to consider alternatives.