May 26, 2018
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Moody’s report reinforces Republican policies

By Jim Parker, Special to the BDN

After reading a recent report on Maine’s credit outlook issued by Moody’s Investors Service, I was surprised to see several Democrats try to spin it to attack Republicans. Moody’s maintained the credit rating of Maine’s bonds, but reduced the outlook for future debts taken out by the state.

I encourage readers to read the brief, two-page analysis firsthand. It affirms many of the themes Republicans have been talking about since taking power in Augusta.

One Democratic opinion piece that caught my eye was Amy Fried’s column, “Costly Cuts,” in the Bangor Daily News on May 22. Fried spends one-third of her column focusing on one observation by Moody’s that declares reduced Medicaid spending may mean fewer health care jobs.
Moody’s did not cite this as a significant reason for its change in outlook. It left the health care jobs factor out of its lists of “strengths” and “challenges” of Maine’s bond rating prospects and did not include it in its list of factors that could sway the state’s future outlook.

Besides, a study conducted by the Maine Heritage Policy Center in December found that raising taxes to cover this year’s $121 million deficit at the Department of Health and Human Services deficit — the only alternative to the spending cuts — would cost Maine 6,400 jobs.

The Moody’s report specifically cites DHHS spending as a major problem for Maine’s fiscal situation. The Republican-led Legislature has begun to address this problem, passing several budgets this year that make structural cuts to DHHS to produce lasting savings.

Paramount in Moody’s decision-making were several factors that Republicans have been facing that Democrats ignored for years. Moody’s cited Maine’s strengths as higher than expected tax revenues; below average debt ratios; and pension reforms passed as part of the biennial budget. It should be noted that Democrats opposed the sensible pension reforms enacted under Republican leadership that cut the projected deficit by almost 40 percent, saved $338 million during the current budget cycle and safeguarded the retirement system’s long-term solvency.

Moody’s described Maine’s challenges as having low levels of cash on hand, voter bond initiatives that create fiscal uncertainty and an aging population. Admittedly, it has been hard to keep much cash on hand after Democrats left the state with an enormous debt to hospitals and a gigantic MaineCare program that endlessly hemorrhages money.

We also had to nearly empty the rainy day fund to repay $29.7 million to the federal government for DHHS overbilling in 2002 for “targeted case management.” Republicans have been fixing these problems, slowly but surely, over the objection of Democrats in the Legislature.

As for voter bond initiatives, Republicans have been far more hesitant to approve ballot questions that put Maine deeper in debt. The first regular session of this Legislature was the first in over 20 years in which no bond package was approved.

Finally, Maine’s demographic outlook would improve if our children were not lured out of state by jobs that can’t be found here at home, and this is why Republican pro-growth policies are so important.

Moody’s concluded its report with some recommendations and warnings, encouraging us to establish a “trend of structural budget balance.” The bottom line is that Democrats refused to address Maine’s bloated welfare and pension programs for decades. Imagine Moody’s rating had Republicans not been at the helm for the past 17 months.

Then, on May 25, Standard & Poor’s made many of the same observations. However, they were more optimistic about Maine’s outlook, increasing it from negative to stable. S&P cited attempts to control MaineCare spending, pension reforms, moderate debt levels and an improving Maine economy as reasons for its outlook upgrade.

You know that it is campaign season and Democrats are getting desperate when they start to spin a report such as Moody’s — a report that reinforces Republican arguments for those who read the primary source instead of relying on columns such as Fried’s, which are rife with lies by omission.

Democrats would be well advised to stop manufacturing bad news and start acknowledging the great strides made in the past two years, including their own role in many of those accomplishments, and present the people of Maine with their own vision for the future. The voters will decide which course they prefer.

State Rep. Jim Parker, R-Veazie, an environmental engineer, serves on the Legislature’s Environment and Natural Resources Committee.

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