State budgets skip cost of tax breaks

Posted May 15, 2012, at 5:26 p.m.

“This Legislature will not repeat the mistakes of the past by using a one-time windfall to put a Band-Aid over our broken system in the hopes that the problem will go away,” House Speaker Robert Nutting, R-Oakland, told reporters last week.

Whew. That’s a relief.

Until you consider what the Republicans will do instead: Grant some equally irresponsible tax breaks that will go into effect in 2014 without any mention of how they will be funded.

What’s more, the “balanced” budget relies upon three MaineCare benefit cuts the federal government has already indicated are not permitted under existing Medicare rules. It is entirely possible, even likely, the feds will not grant these anticipated waivers.

This is a balanced budget in name only, which sets the stage for another governmental crisis in 2014.

The largest tax reduction would go to people receiving pensions (an estimated $26 million), part of the governor’s program to retain and attract retirees from other states.

It would lift the base income tax exemption for pensions income from $6,000 to $10,000 per year.

The governor’s goal might be a good one — to make Maine more competitive with other retiree havens with no income tax — but it compounds the unfairness to the thousands of Mainers who must continue working into retirement or who rely on IRAs or 401(k) investments.

With pensions rapidly disappearing from the private sector, this will be a real boon to public employees including teachers, school administrators, government workers and, of course, legislators.

But here’s the larger problem: While the budget is very detailed in how it will cut state services — mostly for children, the disabled and the elderly — the line items for three tax breaks are simply blank.

It’s like making a family budget and arbitrarily leaving out three clearly anticipated and unavoidable expenses just because they make the budget appear balanced.

If included, this budget would go from a supposed $6.5 million surplus to a likely $21 million deficit beginning in 2014.

The governor and Legislature came to office vowing to cut “welfare,” a word that conjures images of pot-smoking bums too lazy to work. By all means, cut them out.

But when you read the list of proposed cuts, a large number clearly have nothing to do with welfare cheats and able-bodied people who choose not to work.

They include cuts to adult mental health crisis services, Head Start, contracts for residential mental health services, drugs for the elderly, foster care, smoking cessation and home health visits to keep people out of nursing homes.

Next week, legislators should vote “no” on on this budget and go back to the drawing board until it is truly balanced.

Lewiston Sun Journal, May 13

http://bangordailynews.com/2012/05/15/opinion/state-budgets-skip-cost-of-tax-breaks/ printed on April 24, 2014