On Tuesday, voters enrolled in the Republican and Democratic parties will go to the polls to choose their nominees for governor. The choices they make are critical, because the governor Maine elects in November faces a crossroads of historic proportions.
The opportunity for that governor — and it is a once-in-a-generation opportunity — is to remake state government to match the fiscal and economic realities of the early 21st century. That new state government must be lean, it must be user-friendly, and it must shed some activities altogether while embracing others more comprehensively. It must invest in educating a high-quality, flexible work force at both the K-12 and postsecondary levels, yet do so more efficiently than ever before. It must protect Maine’s valuable quality of place while simultaneously streamlining and in some cases easing the regulatory burden on business. It must maintain a social safety net, but not create a class dependent on public support. In short, state government must become smart, nimble, efficient and effective.
Even if most readers agree with this mission statement for state government, there is a conundrum that comes with Tuesday’s votes, which is highlighted by the large number of voters who remain undecided. If Republicans and Democrats choose the wrong candidates, the November election may be moot.
A good case can be made that Maine needs a Republican, or independent, governor at this juncture, especially if Democrats retain control of the House of Representatives and keep at least 16 seats in the Senate. If Republicans choose a social conservative or a candidate with radical and ultimately impractical conservative fiscal views, the state’s Democratic and unenrolled voters will not elect him in November.
On the Democratic side, Pat McGowan, Libby Mitchell and Steve Rowe have essentially said they believe state government, as currently configured, is largely sound. Although they talk of cutting state spending, they are less fiscally conservative and less committed to fundamentally remaking government than the current governor. Rosa Scarcelli, a business owner and manager, understands the need to re-imagine state government, but her ability to rebuild it remains a question mark.
The successful next governor must know how state government works in order to make it efficient and effective. Peter Mills, a longtime Republican legislator, is extraordinarily knowledgeable about the complex inner working of state government, and — most important — knows what needs to be fixed and how to do it. His views on same-sex marriage, abortion and health care rankle many GOP faithful. Yet those views will not be central in the work that lies ahead for the next governor. Steve Abbott, longtime chief of staff for Sen. Susan Collins, is the other GOP candidate who understands the inner workings of government, and has the skills to make it function well for business while spending efficiently and effectively.
Two factors make this year’s choice critical yet also promising. The first is that the state budget is at a historic ebb, with spending at 2004 levels. That work was done by Gov. John Baldacci and the Democratic-controlled Legislature, and accomplished without a hike in the sales tax (something Republican Gov. John McKernan resorted to when the 1991 recession decimated state revenues). The second factor is that the next governor will have at his or her back an extraordinary political will from the electorate to remake government. That support may soon dissipate so it can’t be squandered.
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Voters should reject Question 1, which would repeal a new tax plan and they should approve $108 million in borrowing to boost the Maine economy.
The new tax structure reduces income taxes, improves the state’s business climate, helps government avoid future recession-related revenue roller coasters and reduces the overall state tax burden on 87 percent of residents. The repeal referendum must be defeated if Maine is to reverse its reputation as a tough place to grow a business and a family.
The plan reduces the state income tax from 8.5 percent to 6.5 percent for most people, which means bigger paychecks for Maine workers.
Since 90 percent of Maine businesses file taxes in the same way as individuals and couples, they also will see savings. Sen. Joe Perry of Bangor, an architect of the plan, said that change “takes the bull’s-eye off us as one of the highest-taxed states in the nation.”
To balance that revenue loss, the current 5 percent sales tax is broadened to repair services, including the labor on auto repair; entertainment such as concert and movie tickets; and other services such as dry cleaning, pet boarding, limousine trips and storage unit rentals. Maine has one of the narrowest sales taxes in the nation, taxing 24 of 160 categories. That has meant the state relies heavily on the tax on auto and building material sales (which account for 35 percent of sales tax revenue), both of which dry up during recessions.
The plan also increases the tax on meals and lodging from 7 percent to 8.5 percent. Some 40 percent of that new revenue will be borne by out-of-staters.
Critics note the plan ends itemized deductions on the state income tax. But they leave out that deductions are replaced by a credit, so 95 percent of Mainers will see lower income taxes, according to the Maine Revenue Service.
The four bond issues voters are asked to approve include $26.5 million to fund development of offshore wind electricity; $47.8 million to improve state highways, railroads, ports and harbors; $23.7 million for direct economic development and $10.2 million to build wastewater treatment facilities and improve public and agricultural water supplies.
With interest rates at historic lows, these bonds are a bargain for building and rebuilding Maine. They should be passed.