On the Governor's Proposed Budget

I like Republican Gov. Paul LePage’s new budget.

Really.

No, I haven’t lost my mind, although that remains a possible excuse for future columns. And my newfound respect for LePage’s fiscal prowess isn’t the result of bad drugs, because the doctor assured me any side effects wouldn’t alter my political philosophy.

I’m as clear-headed as I ever am this early in the morning (noon). I just like this budget.

Sure, it contains some items that could charitably be described as unworkable (a statewide teacher contact), ineffective (a $400 “property tax fairness credit” for low-income elderly people), nasty (outlawing General Assistance payments for asylum seekers) cruel (cutting off Medicaid for some parents making less than $10,000 a year) and nuts (a change in the school-funding formula that looks suspiciously like a cut in state aid to education).

Like every governor’s spending plan, the new budget isn’t perfect. But it does offer several sound proposals aimed at fixing longstanding problems with Maine’s financial situation. The fact that much of the best stuff stands no chance of passing the Legislature is no reason not to acknowledge that LePage has a clear vision of what’s wrong and what needs to be done to correct it.

Let’s start with the Rainy Day Fund. This is money that’s supposed to be available in emergencies, such as a recession. There’s currently about $123 million in there. If we experienced another severe downturn, that’s enough cash to last approximately 20 minutes. The governor wants to add $40 million, thereby giving us an additional cushion of 6 minutes and change. It’s not enough to correct the problem of insufficient savings, but it is a shift from the standard budget approach of “if we’ve got it, we’re spending it.”

Also, boosting reserves sits well with bond rating agencies, which means the state will pay lower interest on future borrowing.

Who could be against that?

1. Democrats, who want to use the money for new spending.

2. Republicans, who want to use the money for tax cuts.

Expect that $40-million figure to be significantly smaller in the final budget.

Next up: taxes. LePage wants to reduce the top income-tax rate from its current 7.15 percent (but set to increase this year to 10.15 percent) until everyone is paying a 5.75 percent flat tax by 2020. To make up for the lost revenue, the governor would expand (he uses the delightful euphemism “modernize”) the sales tax to cover ski tickets, golf fees, amusement parks, lawn mowing, tickets for movies and concerts, haircuts, house painting, snowplowing, dry cleaning and other services. Also, the tax on hotel rooms would jump from 9 to 10 percent.

This makes sense, since a large portion of the new taxes would be collected from tourists and rich people with second homes. In addition, it would help broaden the sales tax base, which is overly reliant on vehicle purchases (expected to fall sharply this year) and materials for home construction and improvements (the first spending that gets cut in a recession).

Who could be against that?

1. Republicans, who – with the exception of LePage – have been united in opposing anything that resembles a tax hike, even if the overall package is revenue neutral. The GOP succeeded in stripping a more ambitious tax shift from the governor’s budget two years ago and has displayed little enthusiasm for the revamped version.

2. Democrats, who forced through a similar tax-reform plan in 2010, only to see Republicans overturn it with a People’s Veto campaign, after which the GOP used the issue to clobber the Dems in legislative elections.

Finally, LePage wants to give cities and towns a tool to reduce property taxes by allowing them to charge nonprofit organizations service fees to cover the costs of police, fire and public works. It would end the free ride enjoyed by hospitals, religious institutions and charitable outfits by requiring them to reimburse municipalities for the benefits they enjoy at other taxpayers’ expense.

Who could be against that?

1. Democrats, who fear the fees will reduce money for those in need.

2. Republicans, who fear the wrath of rich campaign donors who sit on hospital boards.

But who needs those self-serving creeps, guv. You’ve still got me.

 

I’ve budgeted some time to read emails sent to This email address is being protected from spambots. You need JavaScript enabled to view it..

Last modified onMonday, 16 January 2017 12:49