Economic Realities
10/14/08 | 7 comments

Economic Realities


BANGOR DAILY NEWS GRAPHIC BASED ON AP FILE PHOTO BY JIM COLE

As difficult as it was to shrink the state budget earlier this year, lawmakers will face an even more difficult task next year. Already facing a $500 million gap between state revenues and expenditures over the next two years, the current economic downturn is likely only to widen that gap.

“We’re not officially in a recession, but it certainly feels like it,” Gov. John Baldacci said in a recent radio address.

As a result, he’s asked every state department to submit documents showing where they would cut 10 percent. He’s already made the cuts in his office. This doesn’t mean that the administration will cut spending 10 percent across the board, which would be a very blunt way to deal with a complex, but long foreseen problem.

Instead, this exercise should be the beginning of a conversation that has gone on in fits and starts in Augusta for years but never came to serious conclusions, and which will dominate the next legislative session.

The result must be to prioritize state spending. This work of evaluating programs and services — within and across departments — is long overdue and will lead to important discussions about what programs and services the state can realistically provide with the funds it has. Through this work, lawmakers should decide what work is truly essential and what is important but can’t be paid for with the state’s increasingly limited resources. Some programs and services will be pared back. Some, and the employees who provide them, will be eliminated.

Earlier this year, lawmakers were able to close a $200 million gap in the current budget by cutting programs and raising some fees. The task is more difficult now, because any cuts in programs and services will come on top of those made in the spring.

This highlights the need to re-double efforts to consolidate government and public services at all levels. A plan to consolidate state and county corrections operations has been slowed down and school administration consolidation remains controversial, although most districts are moving ahead with plans to work with their neighbors.

A report released earlier this year by the State Planning Office showed the results of LD 1, the citizen referendum requiring the state to pay 55 percent of local education costs to reduce the tax burden. The measure also set spending limits for state, municipal and county governments.

According to the report, the state and the majority of municipalities and counties were under their limits, but 82 percent of school units exceeded their caps by a total of $132 million, money borne by taxpayers. The percentage of school units exceeding the caps has increased each year since LD 1 went into effect.

Lawmakers must take a closer look at this situation.

Although addressing spending is the first priority, a tax increase should be part of the discussion. Lawmakers may decide that some state services are so necessary that raising taxes to pay for them may be appropriate.

Maine’s, and the nation’s, economic situation means that difficult and unpopular decisions will have to be made. Those decisions must be made after close scrutiny of all state spending and with the expectation that the lowest spending priorities are likely to be cut.

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Comments
7 comments on this item
On 10/14/08 at 3:51 AM, Johninphilippines wrote:         Repeated separate thumbs down will cause comment to be hidden

There was no caption as to who this guy in the photo was. I don't know him. If Maine just does not go off in spending spurts on unnecessary programs and in other efforts to increase taxes...in other words keep things at low-medium, maybe they can get through this natiional mess. Be careful, because the assistant secretary of the US Treasury is a 35-year old guy, who has an Asian-Indian name or an Arabic name (I don't know about him...never heard of him until today), shaves his head, and seems to be quite smart, but unless the US straightens out financially and ecopnomically, the individual state's cannot realistically follow-suit too well. Be careful of incoming developers, because the state of Maine is depending on these corporations to pay taxes into Maine's economy, but that, too, comes with more cost-benefit problems...more costs than benefits. I hate to keep saying it, but I think Maine's Augusta-Boys just don't get it, as they are obvious as to not be able to initiate good deals for the state and take so many years to get off their duff's in making those decisions.

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On 10/14/08 at 6:33 AM, downbeat wrote:         Repeated separate thumbs down will cause comment to be hidden

This state has had poor performance even when times were good in the country. [ Except for Cumberland and York counties] We have a beautiful state but we have created an entitlement mentality. There are jobs everywhere for someone that wants to work, but we have lost the respect we used to give people for work , no matter what the job is. Don't look for Maine goverment to solve our issues, look in the mirror.

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On 10/14/08 at 8:18 AM, Coolfusion wrote:         Repeated separate thumbs down will cause comment to be hidden

We will be able to judge the sincerity of the Department of Education in making rational and prudent budget cut decisions when we are able to view their proposals and see that the Maine Maritime Academy has been fully scrutinized and appropriate and sizable cuts have been initiated to their lavish state subsidizations. Acquiring $1,600,000 mansions for their president from the 2007 enacted bond fund and maintaining a $multi-million dollar alumi center for a student body of 800 is beyond comprehension. Agressively recruiting out-of-state students which make up 1/2 of the student body and leave immediately after graduation is not in the interest of Maine taxpayers nor Maine youth which are seeing tuition increases and facility budget cuts. A small college doesn't need their own Augusta lobbyist on the payroll.

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On 10/14/08 at 9:11 AM, ckc1996 wrote:         Repeated separate thumbs down will cause comment to be hidden

The entitlement society created over the past 30-40 years has severely damaged Maine's economy. Unfortunately it would probably take that many years to fix the damage.

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On 10/14/08 at 11:24 AM, barbra wrote:         Repeated separate thumbs down will cause comment to be hidden

It's a small percentage of working people in Maine trying to support the approximately 50% who live on welfare and other entitlement programs, and pay the Social Security and Medicare of those retired-since there is no money in the Social Secuity system and many older individuals never paid in the amount of money they have so far collected because of low wages many years ago and people live longer.

There is something wrong with a system that will allow Social Security to give SSI (WELFARE) to drug addicts, alcoholics, and eveyone who claims to have a mental illness!!! Getting SSI automatically entitles the indivdual to Medicaid (Mainecare) and Foodstamps (if they apply), Section 8 housing, fuel assistance....There is a difference when someone has WORKED and becomes disabled and recieves SSDI, social security based upon their wage credits. EVERYONE regardless of age, health, or other factors can do SOMETHING. TANF (welfare for single parents) is limited to FIVE years in one's life time by the Federal goverment, but Maine is so rich that they will pay it for a LIFETIME! They are coming by the busload from other states, where their benefits have run out-MA, CT, NY, etc. I believe in giving a man a fishhook & teaching him to fish, NOT in handing him his daily fish and then cooking it for him. People on entitlement programs should have time limits, should be required to work or volunteer at least 20 hours per week. Gosh! most of hollywood stars are drug addicts, alcolholics, and suffer from mental illness and they work, earn milliions, and PAY TAXES.

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On 10/14/08 at 12:15 PM, downfleeced wrote:         Repeated separate thumbs down will cause comment to be hidden

It's going to take even longer ckc1996 if we keep electing the same people back into office. Nobody seems to see a pattern of what our legislature says they will change, don't or do the opposite, complain about us not wanting to fund their welfare programs, get re-elected after promises, don't follow through...and so it goes....

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On 10/15/08 at 7:08 AM, Mainecommenter wrote:         Repeated separate thumbs down will cause comment to be hidden

Johninphilippines said: "Be careful, because the assistant secretary of the US Treasury is a 35-year old guy, who has an Asian-Indian name or an Arabic name..." I'm glad you said that he was smart, John, but why should his name matter? I've been the first to criticize fellow Republicans for the idiotic focus on Obama's middle name...it seems that the far left is no different!

So, you've never seen the Governor's likeness before?

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