The best solutions to problems are often the simplest ones. That is the attitude the 125th Legislature took in untangling the web of regulations and tax policies that held Maine back for decades. While there is still plenty of work to be done, Maine residents should be proud of the significant steps their Legislature has taken to make the state a more business-friendly, competitive state that also takes care of its own.
I was honored to be part of the bipartisan Regulatory Fairness and Reform Committee that traveled the state listening to the concerns of business owners. Their biggest complaint concerned the state’s thick jungle of regulations that made it tough to do business. Partly due to regulatory overkill, Maine consistently ranked among the least business-friendly states in the nation.
In the wake of our “red tape” listening tour, sweeping regulatory reform legislation passed by a 147-3 vote in the Maine House and with no opposition in the Senate. The legislation eliminates unnecessary and redundant regulations, streamlines the Board of Environmental Protection and creates a business ombudsman within the Department of Economic and Community Development to help business owners navigate the state’s regulatory system.
These changes are already paying off. The time it takes to obtain land-use permits has dropped from an average of 70 days in 2010 to 53 days in 2011. According to the Department of Environmental Protection, a co-owner of seven Tractor Supply Co. stores in Maine recently said, “Although there is still room for improvement on turnaround time, we got our permit in half the time as our previous five projects.”
One burdensome regulation stemmed from legislation that passed in 2008, which expanded the number of “dangerous chemicals” business owners had to report to state officials to more than 1,700. This was an unreasonable requirement that cost time and money. Legislation passed by the Environment and Natural Resources Committee trimmed that list to 70, allowing state officials to concentrate on monitoring the most dangerous chemicals and freeing business owners from unnecessary oversight.
The new attitude in Augusta drew national notice. In one year, Maine jumped from 40th to 35th in CNBC’s annual ranking of America’s Top States for Business.
Another factor brightening Maine’s business climate is tax reform. The 125th Legislature passed the biggest tax cut in state history. Nearly half a million Maine households will receive an average tax cut of $337 in 2013. Middle-income families will see their taxes reduced by about 15 percent, and more than 70,000 low- and middle-income filers will owe no state income taxes as a result of the new zero percent bracket.
Another significant accomplishment will benefit retired state workers, teachers and taxpayers for years to come. As part of the biennial budget — passed with overwhelming bipartisan support — we overhauled the public pension system. Without reform, the state’s payments into the retirement system would have skyrocketed to nearly $600 million a year by 2018, leading to the cannibalization of other critical state functions, such as education and public safety.
By making modest reforms, without cutting anyone’s benefits or increasing contributions from plan members, we were able to reduce the unfunded liability by $1.6 billion. In this current budget cycle, the changes are saving taxpayers an estimated $334 million. Taxpayers will save more than $3 billion by 2028, when the state’s retirement debt must be paid off. These reforms put the long-troubled system on secure financial footing for the future.
Under new Republican leadership, we also were able to confront the problem that led to our chronic budget shortfalls — overspending. Under Democratic leadership, Medicaid spending grew at a blistering pace, greatly exceeding the national average.
Maine had racked up a 79 percent increase in MaineCare costs since 2002, while the state’s population only grew by 7 percent.
Year after year, the Legislature was forced to find ways to cover budget shortfalls. (Familiar tactics included state worker furloughs and refusal to pay hospital bills for MaineCare patients.) The structural changes we made in the budget reduce Medicaid spending to a level that still exceeds the national average, but will ensure we don’t have to fill budget gaps every year at the expense of other state programs. The reforms also protect the safety net for Mainers who truly need it.
Unlike the gridlock we see in Washington these days, we made all these changes with broad, bipartisan support. Thanks to strong leadership, we were able to tackle tough problems that had been ignored for too long, and the people of Maine are better off because of it.
State Rep. Jim Parker, R-Veazie, serves on the Environment and Natural Resources Committee.