State budget gimmicks reveal lack of leadership

Posted Feb. 19, 2010, at 7:17 p.m.

Don’t they ever learn? I realize times are tough and budgets are tight in Augusta, but my jaw dropped when I read an article recently in the Bangor Daily News that said the state planned to realize $8.2 million in “net savings” by delaying payroll payments to state workers for three days at the end of the fiscal year and pushing the payments off to the following fiscal year.

What? That’s no savings at all. That is like someone failing to make a car payment this month and claiming that he’s “saved” enough money to buy a new TV.

This is the “Wimpy” school of economics — the character from Popeye who always offered to “gladly pay you Tuesday for a hamburger today.” Delaying expenses only delays the inevitable and digs an even deeper hole of debt that someone — in this case the next governor — will have to solve.

The next shortfall could add up to a billion dollars due to unfunded pension liabilities, lower Medicaid-Medicare reimbursements, flat growth and no federal stimulus money to close the gap. No amount of fiscal gymnastics and gimmicks will avoid this day of reckoning.

And what makes these fiscal gimmicks even worse is that we’ve traveled this discredited road before. During the budget difficulties of the early ’90s, the state used the payroll push and other gimmicks to “balance” the state budget. These gimmicks, which wouldn’t pass muster in an Accounting 101 class, were widely criticized and became a key factor in the 1994 governor’s race that saw independent Angus King elected to office. He pledged to unwind the gimmicks from the state budget, and the voters handed him the keys to the Blaine House to get the job done.

So here we are in 2010 and once again we’re balancing the state budget with gimmicks like the payroll push, temporary borrowing and one-time federal money. And once again, Democrats are being roundly criticized. They are not only threatening the state’s credit and bond ratings, but they are also threatening to take our party down to another 1994-style defeat in November.

It doesn’t have to be this way.

Democrats in Augusta need to get real. They need to apply some basic business and accounting skills and draft a budget that doesn’t invite ridicule. They need to make some very tough decisions and then communicate the extent of the state’s true fiscal problems to the public. And they need to make bold, structural changes throughout state government rather than just paper over the inefficiencies and redundancies that got us into this problem in the first place.

There’s another important step they can take. They can strengthen the Maine Office of Program Evaluation and Government Accountability. This 5-year-old nonpartisan watchdog agency was established — over the objections of many elected leaders — to analyze state programs and find savings and efficiencies throughout state government. Despite efforts by some leading Democrats to close it, OPEGA has recommended changes that could result in over $20 million in savings — if they had been adopted. Unfortunately, only about a third of OPEGA’s recommendations have been adopted by the Legislature.

As a businesswoman and a professional manager, I know how fundamental to success it is to measure every program. How else will we know if our time and money are getting the results we expect? OPEGA needs more teeth. It needs more independence from the Legislature and more staff. In states that have done this right, they’ve realized enormous savings. We don’t need a new commission or blue-ribbon study to find savings in state government. We just need to use the resources we have more wisely. That means expanding and fully empowering OPEGA to fulfill its mission.

As I travel across the state listening to the concerns of Mainers who are suffering, I often say that we cannot bring our state into the 21st century world economy with a 19th century way of governing. No less than our success or failure as a state rests on whether, and how, we embrace the values of efficiency, accountability and transparency as we begin to move Maine forward.

Maine people deserve to know that each and every penny of our hard-earned money is being well spent by those they entrust in state government. Maine people deserve to know that our leaders have basic common sense and the experience necessary to responsibly manage critical functions in a more “businesslike” manner.

Maine people deserve a governor who will change our approach from blind across-the-board cutting to one where we cut only programs that are not working, rework those that deserve to be saved and make smart investments in the future success of our state.

In short, Maine people deserve better.

Democrats lead on so many important issues of fairness, equality, compassion and care. It’s time for Maine Democrats to lead on fiscal management, too.

Rosa Scarcelli, Democratic candidate for governor, is the owner and CEO of Stanford Management, which provides affordable housing in more than 30 Maine communities. A native of Wilton, Scarcelli lives in Portland with her husband, Thom, and their three children.

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