Cuts can be costly. As the saying goes, one can be pennywise and pound foolish.
Whether maintaining a home or managing a business, sometimes frugality backfires, leading to more spending and costs down the road.
Maine’s supplementary budget and a new approach on taxes will be quite costly.
At the end of last week, just as Gov. LePage issued his own report card for his first five hundred days in office, Moody’s credit rating service’s assessment was far less positive. Moody’s decision to change its bond outlook from stable to negative raised cautions. If the rating is changed, Maine people would pay more for the money the state borrows to fix its roads and fund bonds for conservation or research and development.
Bonding is the way governments are able to make large investments that ultimately pay off for citizens. Better roads reduce wear and tear on vehicles, saving individuals’ the need to replace tires or fix the front end. Bonds enhance development in the long term, creating opportunities and improving human capital. This is true whether a business or nonprofit organization offers goods or services, caters to tourists or sells to Mainers or overseas, or focuses on research or people’s fundamental needs. In the short term, bonds create construction and other jobs.
Moody’s noted that cuts to DHHS will have negative effects on the economy, saying, “While the health care jobs have been an economic driver over the course of the recent recession, the state’s efforts to reduce spending on social services, especially Medicaid, may reduce future growth prospects for that sector.”
Cutting DHHS hurts Maine’s economy at a time when the state’s job growth is remarkably weak.
The country as a whole has had 26 months straight of private sector job growth — 4.2 million altogether and 1 million in the last six months — a shift from the job record of the former president. (During George W. Bush’s administration, private sector jobs shrank an average of 6,700 a month.)
But in Maine, as the Maine Center for Economic Policy reports, the ”rate of job growth — in the public sector, private sector, or total, has trailed all but a handful of states. … From January 2011 to April 2012, Maine ranks 45th in private sector job growth and 46th in total job growth.”
With this weak employment record, it does not make sense to undermine one bright spot, especially as Maine’s population is aging and needs care. Although most jobs affected by DHHS cuts involve taking care of patients, they include support staff with high school degrees and highly educated trainers and researchers. And these job losses hurt local businesses.
Besides noting the budget’s weakness for sustaining health care commitments, Moody’s pointed to the state’s lack of budget reserves. It’s not surprising that, in hard times and with a weak job market in the state, the state doesn’t have much in the way of reserves. But last year’s tax policy and LD 849, now awaiting Gov. LePage’s signature, were structured to create future budget gaps. They are a set up for claims Maine can’t afford what we used to afford and for low reserves.
As Gov. LePage’s Finance Commissioner Sawin Milllett noted, LD 849 allows “one-time savings, to trigger ongoing permanent reduction in revenue,” shifting revenue and expenditures out of balance. Such tax policies are ticking budget time bombs, not only moving Maine away from what all the credit rating organizations consider to be healthy practices, but also harming Maine citizens.
Besides putting a brake on Maine’s economy and undermining the state’s creditworthiness, cuts hurt thousands, undermining public health clinics and leading to cost shifting.
Without a doubt, health care costs must be contained. But this can be done more smartly, by catching problems early, monitoring people with chronic needs whose illnesses can be controlled, and investing in systems and public health services that prevent hugely expensive, repeated hospital stays.
Looking to Maine’s future, a 2012 report by the Maine Chamber of Commerce and the Maine Development Foundation said “investment in Maine children is real economic development,” yet the state slashed HeadStart, a program that gives kids real opportunity to succeed.
Such cuts are truly costly.
Amy Fried is a professor of political science at the University of Maine. You can follow her on Twitter at ASFried and at her blog, www.pollways.com.
While Professor Fried’s outlook is done in the purity of the academic world, it does, unfortunately, make sense and is supported by Paulie’s own Finance Commissioner no less. What has still to be taken seriously is the impact on Maine’s current, and future, bond rating. Cost cutting and reform are always 2 big areas that are an ongoing process in any type of financial environment. But when, and this is where Professor Fried is more accurate than she realizes, the cost cutting and reform process is substituted with a cost shifting means then we had ALL better wake up and start smelling the coffee, no matter how long it’s been on the stove !
Cost shifting is nothing more than cost dumping (or cost evading) by those that do not want to pay their fair share. LePage has more than made clear his intention to cost shift (dump on) on those who can least afford to take the ‘hit’, and are thus not able to fight back since they don’t have the BIG BUCK’S to be able to defend themselves when his ‘cost cutter’s’ start sweeping in and cutting, wholesale, the health care needs of those Mainer’s who can least afford to be without. Paulie’s ‘cost shifting’ is gonna do nothing more than cut the cost’s by cutting off the basic medical services from those who can least afford to be without them and, instead, dump these folk’s who need medical services on to the hospital’s under the basic emergency room concept. That’s not cost cutting. That’s cost shifting and Paulie and his DHHS Commissioner know it. It’s also what got the hospital’s in such trouble over the past few year’s. And Paulie wants to accellerate this nonsense ? That they are trying to hide this dog and pony show from the public also tells me that they know what they are doing is not just wrong but is also bad public policy. Cost shifting eventually catches up with you. And with November down the road, the catching up is not that far off. Given Moody’s publicly announced change in Maine’s bondrating, one would think, the first sign’s of that catching up are starting to be seen. The longer this is ignored, the worse it’s gonna get.
In other words, we need to expand our welfare programs in order to “cut costs.” Nice try. The Democrats irresponsible expansions of welfare programs in this state have lead to Maine having one of the worst economies, lowest income levels and highest taxed in the country.
Exactly right, PR.
Then if you don’t like the idea of cost shifting then how about we all try what’s been out there for health care since Day 1, namely Public Option, aka, Universal Single Payer ? Then everybody pays and this whole moosehumping is solved since everyone is covered. But to go and keep doing over what we all know doesn’t work just shows how stupid we all are ! The GOP concept of Health Care has been seen, from the beginning of the debate, to be noting less than the old arguement of ‘Stay healthy but if you do get sick, please die quickly so we don’t have to look out for you’, Such a philosophy says a lot about the character of those who supposed to be looking out for the public’s interest. It also has a lot of long term consequences when it comes to making it work. Cost shifting isin’t work. It’s running from responsibiity. And Paulie and Company should know better. So should the rest of the GOP and their follower’s.
“The GOP concept of
Health Care has been seen, from the beginning of the debate, to be noting less
than the old arguement of ‘Stay healthy but if you do get sick, please die
quickly so we don’t have to look out for you'”
What an absurd lie. Does that make you feel superior by lying like that? Is that what the MPA tells you to say? You closed-minded liberals pretend you have compassion all the while you destroy our health care safety net but expanding it far beyond what it was designed for. But it is not just the safety net you are and have destroyed – look at this state – look at our roads, our education system, our economy, our wages – all because of the Democrats feel-good and totally irresponsible expansions of welfare programs and “consumer protections” in health insurance. It is a veritable WAR on Maine.
Want single-payer? – Move to Vermont.
Move to Vermont ? Given Maine’s refusal to address the healthcare issue thru health care reform and simplifying the costing issue’s, more than a few Maine company’s are doing exactly that, along with their workforce. And as far the GOP mantra of ‘Healthcare for only those that can afford it’, well who do think actually does the work to make the business’s profitable ? Those same folk’s, who by the way, are getting their healthcare gutted simply because some beancounter decides that it’s a useless item of expense on the corporate balance sheet. In case anyone has forgotten that so-called ‘useless expense’ is what keeps your worker’s healthy so that they can come and work and make the company profitable. That is unless you subscribe to the ‘leaky bucket’ philosophy and practice of HR Mangement. If that’s the case, well, it’s nice to have you outta the closet for all to see. And Republican’s say that the 3rd World management and work practice’s aren’t seen here ? Wanna bet ? November, folk’s, is coming. Tick tock, tick tock …………………
Maine’s refusal? Can Augusta force providers to bundle services? Can Augusta rein in trial lawyers and impose tort reform? Can Augusta control Rx costs? If it were in their power, I would vote for people to do it…and MaineCare could probably become the state’s single payer for nearly everyone.
“And as far the GOP mantra of ‘Healthcare for only those that can afford it'”
I know no Republican who has ever said that.
And the healthcare issue in Maine IS finally being addressed!
Don’t like “welfare”? The RESPONSIBLE way to less the welfare rolls is with LIVING WAGES! Did you think we were just paying people who “don’t want to work”? Wrong. We’re subsidizing the labor costs of publicly-chartered institutions (corporations) DON’T WANT TO PAY!
Darn those corporations! It’s all their fault – and ALECs and the Koch’s. Don’t forget George Bush.
We’re supposedly a self-governing, sovereign people, so, no, it’s OUR fault! A corporation is a tool (in more ways than one) interested ONLY in it’s own enrichment, and if costs are shoved onto society, more the better. No, we don’t have to allow our corporations to run the world, and the majority of people who want to reign them in are waking up to the fact that their vote isn’t enough.
Where power follows citizenship, there is democracy. Where power follows money, there is the authoritarian, fascist worldview of the Koch Brothers.
You want to reduce the budget for our social safety net? Then insist businesses pay their labor costs. Cheap labor has become our most expensive “entitlement program”. It’s called “responsibility” — it isn’t just for the working poor.
In politics, “fair” is a one-word oxymoron.
“Show us the money” professor! The balancing the 80 million short fall (cuts made) and lumping future tax cuts sounds good and makes a nice read with tinted glasses. However, the revenue to support the 80 million dollar short fall just was not there. Your arguments will make a nice template for Democrats running this fall for the state legislature. Not only that those running on your arguments will not (can not) show us the revenue money to not continue these cuts. Repealing the tax cuts only get you part way there.
Wrong. Repealing Paulie the Puppet’s tax giveaways to the rich gets us all the way back. Try thinking beyond the original cuts and look at ALL the proposed giveaways to his buds.
So your saying in order for the State to prosper we have to continue supporting people that don’t want to work.
She said nothing of the sort. What she did say is that in order for the state to prosper, we have to continue supporting programs which help the poor take care of themselves and remain productive members of society.
It’s you cons who automatically assume that anyone receiving government assistance is a lazy moocher.
There are a lot of people receiving aid who are working. Some 2 or more jobs who just can’t afford the premiums to buy their health insurance on the open market. That is if they wish to eat and keep a roof over their heads.
Please don’t assume that everyone is unemployed whe get aid. They are just underpaid.