May 26, 2018
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Budget Work Begins

Shrinking the state budget once again will be the primary focus of the legislative session that begins Wednesday. Rather than seeing the budget as crowding out other important work, however, lawmakers should see it as setting priorities for that work.

The state faces an expected $438 million shortfall in state revenues over the next two years. Like other states, Maine continues to see revenues — mostly tax collections — well below what had been anticipated. Forty-eight states have dealt with shortfalls, totaling $193 billion, in their budgets for fiscal year 2010.

The Maine Legislature last year passed a budget for 2010 and 2011 that was $500 million smaller than the previous biennial budget — the first such decrease in more than three decades.

Even with that reduction, the state faces a $209 million projected shortfall in 2010 and a $174 million gap in 2011.

The revenue shortfalls are expected to last beyond 2011, so continuing to downsize government now is as much about closing a current funding gap as aligning state and local government with available resources.

The governor set the right standard when he introduced his proposed supplemental budget last month. “Every dollar possible should be directed toward providing services to the people of Maine.”

For those who disagree with the governor’s proposal, the challenge is to provide better solutions. The governor, for example, proposed reorganizing the state’s natural resource agencies. He didn’t say the four departments should become one or even two, but just putting the idea on the table will be controversial. If some groups oppose this consolidation, they must propose other ways to more efficiently manage fish and wildlife and agriculture while devoting savings to services rather than administration.

Likewise with school consolidation. The state has devoted nearly $1 billion additional funding to kindergarten through grade 12 education over the last decade. Over the same time, the number of students in Maine schools has steadily declined. It is incumbent upon educators to come up with ways to “bend the cost curve,” in current parlance, rather than simply complain that state funding is being reduced or that district consolidation was mandated.

Of course, efficiency is only part of the equation. Prioritization is also overdue. It has been clear for years that Maine can’t sustain the level of government it has come to expect. Each government service has a constituency, but not all these services are of equal importance.

Lawmakers, especially those on the Appropriations Committee, have the difficult task of determining which are of higher priorities than others and allocating scarce dollars appropriately. This means some programs will be reduced or eliminated.

Raising taxes to help plug the budget hole may make sense on paper, but it is politically impossible. Any broad tax increase would need the support of two-thirds of lawmakers, a threshold that can’t be reached. In addition, when Maine residents are facing record unemployment and high economic anxiety, adding to their expenses isn’t an option.

At the same time, lawmakers must ensure that costs are not simply passed down to municipal governments through cuts in revenue sharing and a shrinking of the tax relief Circuit Breaker program, as the governor has proposed.

The bottom line is that limited state dollars must go to services rather than bureaucracy.

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