Snowshoe rabbits and the Maine economy

Recently a visiting Korean scholar was asked about the seemingly erratic behavior of North Korea’s President Kim Jung Il. The scholar opined that it was paradoxical rather than erratic behavior, reflective of an ancient strategy of acting at right angles to an adversary’s expectation. What, one might wonder, could become of Maine if we addressed environmental, health care, higher education and taxes at right angles to the politically correct cures de jour?

Take the case of the near endangered snowshoe rabbit. To save the rabbit, Maine public policy intuition might have us ban new housing developments and ATVs. A paradoxical solution might be to reintroduce a revolving patchwork quilt of “clear-cuts” to re-establish the rabbit’s critical thickets now lost to barren understory of “sustainable forestry.” To stop premature timber harvesting, a paradoxical approach might put a moratorium on public purchase of what landowners call “commercial maturing stands” but what public land advocates call “never-to-be-harvested old-growth forests.”

If fiber growth in Maine forests, wildlife diversity, public access, and acreage in forest cover are the best they have been since Joshua Chamberlain fought at Gettysburg, might all of us Mainers, who believe we are multiple-use environmentalists, place just some of our blame for this paradoxical success on the private sector?

Take the skyrocketing cost of health care in Maine. A current Maine solution appears to centralize decision-making and planning, expand government certificate-of-need regulation to reduce wasteful duplication of effort, extend the current single-payer system for teachers and state government employees to all Mainers covered by Dirigo Health. But, what if the certificate-of-need, single-payer insurance system and state planner’s cures are worse than the pain?

What if these cures result in ever-more health monopolies and constraints of trade, disappearance of health care in rural towns, disappearance of competition in Maine cities, higher rather than lower costs for MRIs and similar procedures, higher premiums for insurance because competition is all but gone?

A paradoxical strategy would be to eliminate the certificate-of-need regulation in its entirety, to let Maine teachers and government workers and those in need have choices for their health insurance providers much as federal employees have. What if Maine introduces legislation that gives student loan forgiveness to private dentists (not just public health clinic dentists) who serve the rural poor? What if Maine exchanged the prescriptive hand of government regulation for the invisible hand of the marketplace?

Take the restlessness of public higher education. Maine appropriates far more dollars for public higher education per $1,000 of personal income than any other state in New England: 50 percent more than Vermont and two times New Hampshire. Commission after commission studies public higher education in Maine only to conclude public institutions need more public bond proceeds and more public appropriations for operations.

A paradoxical road less traveled in Maine would be the funding of Maine students rather than Maine educational institutions and to semi-privatize public higher education. While heresy in Maine, one has only to compare how Vermont cost effectively funds its land grant university and how Oregon has semi-privatized the Oregon Health and Science University, to realize there are counterintuitive solutions to public higher education financing approaches of today.

Finally, what about taxes? In many respects the tax cap crisis is analogous to shifting deck chairs on the Titanic. The tax cap advocates are in a “Catch-22” because the property tax is the only tax over which local communities have any control, yet they want to pass the buck to the state. Conversely, the dire predictions of the opponents who claim there will be no money for anything, in a state that is still one of the highest-taxed states in the country (even after a tax cap goes through), is like the little boy who called “Wolf!” (They might defeat the cap but in the process reinforce the image of Maine as a taxing pariah.)

What about a paradoxical approach? What about a concept of using property taxes for property services (roads, fire, police) and people taxes, like income, sales and sin taxes, for people services (health, education and welfare)? What about progressive across-the-board reductions in tax rates? In Ireland, when they cut the corporate tax from 40 to 12 percent, tax revenues from corporate taxes increase fourfold.

How could this be? It simply “could be” that only profitable corporations pay taxes and, suddenly, Irish companies began to make a profit. A counterintuitive conclusion is that the tax cap crisis has far less to do with property taxes than it has to do with the people seeking a government and champion for genuine tax abatement and reform.

The common denominator in this paradoxical vision of Maine’s future is a state of “incentive” over “prescriptive” regulations, competition over monopolies and constraints on trade, and a snowshoe rabbit-like private economy over a lemming-like march into a socialistic sea.

William H. Beardsley is president of Husson College.