November 07, 2024
Editorial

BUDGET AS TAX POLICY

The proposed state budget before lawmakers is the most important policy document many of them have faced. The budget makes the assertion, finally, that Maine can responsibly control costs on two of its major expenses, health care and education, and it can make state government itself more efficient. There is nothing in the budget that says the proposed cuts are the final word on these essential services; instead, it declares that Maine will create savings not by slowly starving all of its programs but through structural change in its largest.

To reject these cost constraints outright, after so many previous attempts that did not get even this far, is to conclude that legislators are all but incapable of reducing the state’s spending and its tax burden.

The savings come from entering into a managed-care model to administer the state’s Medicaid system, to save $140 million; consolidating school district administration, $36.5 million; and through an initiative to streamline government, $10.1 million. Each of these cuts contain risks, and legislators should be aware that future amendments may be needed as the process of seeking savings proceeds. The reason for going forward now, however, can be seen in the recent string of citizen’s initiatives that do not include the flexibility of the current budget.

Most contentious of all issues is the reduction in the number of school districts. Even lawmakers who acknowledge the historic pattern of falling school populations and rising per-student costs are cautious about making a change at the district level. Some lawmakers, for instance, do not like the amount of authority they believe would accrue to the state Department of Education to drive this policy change. Others think the timeline fails to account for the reality of the undertaking and want more public involvement.

These are serious concerns, but they can be solved with relatively minor amendments. For instance, setting clearer outcomes for what counts as reform gives the local district a greater chance of defending a chosen reform path; and ramping up penalties gradually keeps incentives in place to act but doesn’t heavily punish districts that need more time. The proposal already has been amended to give the public more input – and a vote – at the local level.

Maine has drifted along for years with one of the highest tax burdens in the nation, with a vague commitment to do something, sometime about it. Legislative Republicans have berated Democrats for years for their lack of action on this issue. Now a Democratic governor has not only heard the demand for lower taxes, he has acted, with a specific plan that recognizes the rising costs of health care and falling school populations are not sustainable.

Republicans would not have reshaped the budget precisely this way, but they cannot deny that the governor has attempted to hold down costs on two of the state’s largest expenses. It’s not a perfect budget, but it is the best start in years to balance vital services and the tax burden – of it would be the best start if Democrats and Republicans can come together to pass it.


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