June 21, 2018
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LePage’s ‘$47 million surplus’ quote was reference to last budget; current figures show deficit

By Mario Moretto, BDN Staff

AUGUSTA, Maine — A statement made by Gov. Paul LePage about a $47 million “surplus” had Democrats and others in Augusta scratching their heads Wednesday morning.

In a talk given to a conservative women’s group on Monday, LePage said Maine’s economy was looking good: “The economy as a whole is actually doing pretty well. I don’t want to tell any Democrats because they’ll have it spent before Christmas, but we have about $47 million since July 1 over budget,” LePage is quoted as saying.

Audio of the event surfaced when BDN blogger Mike Tipping, who works for the liberal Maine People’s Alliance, reported receiving it from a person who attended the event. Tipping published the audio on Wednesday morning.

Peter Steele, LePage’s communications director, clarified the quote Wednesday afternoon. Steele said the governor was “speaking informally” about a revenue surplus that was received not since July, but before then. At the end of the last budget biennium, which concluded on June 30, the state had a $58 million revenue surplus, of which about $47 million came from general fund revenue.

But that surplus has already been allocated to various funds, and, according to the most recent report from the Office of Fiscal and Policy Review, revenue is actually coming in at a rate lower than expected, creating a deficit. General fund revenue in the current budget is under the predicted level by about $6.7 million, according to the September report.

LePage’s statement had Democrats scrambling Wednesday morning to find out what the governor was talking about, according to Jodi Quintero, spokeswoman for House Speaker Mark Eves, D-North Berwick.

“We simply don’t know what the governor is talking about,” Eves said. “Either he is not being truthful or he is hiding something from the public and the Legislature. Either way, it’s a problem. All of the official forecasts and numbers we’ve seen from nonpartisan sources show a $6.7 million shortfall through August.”

Steele dismissed the notion that the governor was engaged in subterfuge. He described LePage’s comments as a “quip.”

“Obviously, the governor cannot hide any revenue from anyone,” Steele wrote in an email. “The quip was made in jest, referring to how Democrats will always find a way to spend excess revenue, rather than using it to benefit the taxpayers.”

The surplus, however, was spoken for the moment it was noted. Maine law dictates where surplus revenue is funneled through a process called “the cascade.” Most of the 2013 surplus — $42 million — was dedicated to “budget stabilization,” essentially a rainy day fund to be used in case of a recession.

Follow Mario Moretto on Twitter at @riocarmine.

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