September 22, 2024
Column

Rewrite Maine’s budget

By razor-thin margins of 18-17 in the Senate and 77-74 in the House of Representatives, Maine legislators gave a stamp of approval Thursday to a $5.8 billion partisan Democratic budget whose centerpiece is a massive $450 million borrowing package. If this budget were a car, it would be a lemon. In this case, it is a lemon Maine’s taxpayers will be making payments on for many years to come.

In a sad failure to accept responsibility for their spending decisions, the authors of this budget have masked the true cost of state spending in two key ways. First, they shifted the burden of paying the bill for today’s expenses to our children, saddling them with long-term debt and leaving future legislators with fewer options. Second, they removed selected items from the budget in order to make its true cost appear smaller.

Deeply troubled by this irresponsible and short-sighted approach, a bipartisan group of senators worked to craft a package that sought to inject a degree of honesty and responsibility into the budget. My colleagues Sens. Peter Mills (R-Skowhegan), Dana Dow (R-Waldoboro), Ethan Strimling (D-Portland), John Nutting (D-Leeds) and I, proposed a “pay as you go” amendment that would have required Gov. Baldacci and the Legislature to pay for the budget on our watch.

Being in the minority, and facing the truncated process imposed by Gov. Baldacci and the Democratic leadership, the Republicans in our group recognized that we did not have the votes to resolve our concerns with the spending side of the equation. But we found common ground with our allies across the aisle who shared our disdain for what Senator Mills has called “profligate borrowing.” So we worked with them across party lines in an effort to promote a plan that would begin the process of tax reform and eliminate the irresponsible borrowing that threatens the ability of the state to take on the additional debt of issuing bonds in support of crucial long-term investments.

In the end, a bipartisan group of five Democrat and five Republican senators voted to replace the borrowing with a balanced package I have called the “Truth in Budgeting Amendment.” It included a long overdue cut in Maine’s income tax rate from 8.5 percent to 8 percent, a $350 increase in the personal exemption for every man, woman and child in Maine, the deductibility of health savings accounts, and an important step toward leveling the playing field for Maine’s businesses by increasing the depreciation allowance on new business equipment to $100,000 to conform with federal law.

It would also have added a temporary 1 cent surcharge on the sales tax, to expire Nov. 1, 2006, that would have paid for the $250 million increase in aid to education approved by voters last fall. It also instructed the Taxation Committee to hold hearings on an expansion of Maine’s sales tax to identify which items currently exempted should be included in an expansion of Maine’s narrowly based sales tax to pay for the reduction in income taxes. This approach would have ensured that out-of-state visitors pay a fairer share of the tax burden that now falls too heavily on Maine residents.

Our package was based on the novel concept that, under Maine’s constitutional requirement for a balanced budget, a governor and Legislature committed to a level of spending have a moral obligation to pay for it on their watch – not employ borrowing schemes to mask the cost and leave future taxpayers and legislators holding the bag. The bipartisan Senate plan would have limited borrowing to a comparatively small amount dedicated entirely to refinancing the debt to the state pension system to reduce the pay-back period and save future interest costs.

Traditionally, the budget process has allowed Democrats and Republicans to work together well into April, May or even June to hammer out differences and craft a responsible budget acceptable to two-thirds of the Legislature. But this year, Gov. Baldacci and the Democratic majority that has grown accustomed to controlling the Legislature, drew a line in the sand by imposing an arbitrary April 1 deadline. Using that arbitrary deadline as a pretense, they brushed aside widespread editorial criticism, shut down bipartisan negotiations with those of us who represent nearly half of Maine’s citizens, and rammed through their partisan borrowing-based budget.

Republicans offered a constructive three-month continuing resolution to fund the budget at current spending levels in order to afford both parties time to work through their differences, and avoid the prospect of a state shut-down. Democratic leaders summarily dismissed this olive branch.

In a departure from Maine tradition, their regrettable “my way or the highway” approach devalues collaboration and consensus. During my years working at the side of Sen. Olympia Snowe, I often heard her credit her renowned bipartisan approach to her experience serving in the Maine Legislature in the 1970s, when collaboration and consensus-building were the norm.

The Maine Legislature now operates in a far different environment, where the majority manipulates the process by adjourning the Legislature and calling a Special Session in order to circumvent Maine’s constitution. I am convinced that, left to their own devices,

Republicans and Democrats could have continued their work to produce a far superior bipartisan budget. The only thing that prevented that from happening is an entrenched majority unwilling to engage in that kind of mutually respectful process.

Gov. Baldacci and his partisan allies who run the Legislature had the opportunity to work with us to improve this budget lemon. Their refusal to do so will leave a sour taste in the mouths of Maine’s taxpayers for years to come.

Sen. Kevin L. Raye (R-Perry) represents Senate District 29, which includes all of Washington County and eastern portions of Hancock and Penobscot Counties.


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