AUGUSTA, Maine — Members of the budget writing Appropriations Committee were surprised when Baldacci administration officials revealed revenue producing positions have been frozen at Maine Revenue Services, even as the agency is seeking two new revenue agents.
“It certainly is a confusing strategy,” said Sen. Bill Diamond, D-Windham, co-chair of the committee. “They tell us that there is $40 million that is pretty easily collected in taxes that are due. They are now saying that two new positions will get us millions of dollars and a reasonable person certainly can wonder why the positions have been frozen.”
As of Monday, there were at least 10 positions left unfilled in the agency due to the hiring freeze — five revenue agents, a senior revenue agent and four tax examiners. There are also several administrative positions that provide support to the tax collection positions. The two new positions for revenue agents are being requested on top of the frozen jobs that are expected to be filled after the current fiscal year ends on June 30.
Jerome Gerard, acting director of Maine Revenue Services, said some positions are always vacant in a large state agency, but that his policy has been to keep vacancies at a minimum because all contribute to the tax collection effort.
“There is kind of a double whammy here,” he told lawmakers. “These positions are revenue generating positions and we need to get them back, to work.
He said the vacant jobs were not filled in order to meet budget obligations, but that he was hoping to fill those in the next fiscal year that starts July 1.
Gerard acknowledged that not filling the positions has cost the state tax collections, but he did not estimate how much. In the past, however, he has estimated that each revenue agent generates “several hundred thousand dollars.”
The job freeze has had “some impact on revenue, but to what degree, I don’t know, at this point,” he said.
Rep. Sawin Millett, R-Waterford, the lead GOP member of the panel once served as the state’s finance commissioner. He was surprised that positions that would generate revenue for the state had been frozen, given the state’s revenue problems.
“There are [tax] receivables out there, with the right kind of effort, targeted towards collections that could bring in significant revenue that is owed,” he said.
Under questioning by the committee, Finance Commissioner Ryan Low said the positions had been frozen earlier in the budget year when Gov. John Baldacci issued an executive order blocking the filling of vacant state positions because of declining state revenues.
“We judge each one individually and then we make a decision based on that,” Low said. “Most of these positions are frozen for budget savings in fiscal year ’09, but they will open up in fiscal year ’10.”
Low said he knew about the positions that were vacant in revenue services, but that his analysis was it was best to keep them vacant for revenue savings rather than filling them. He noted that even if a position was filled, it takes months to train that person and have the new agent start to generate tax collections for the state.
“It’s a hard role for us to be engaging in micromanaging who should and shouldn’t be hired,” Millett said, “but, our bottom line objective is to try and close the budget with the fewest new positions being authorized as possible.”
He said with the private sector and local schools and governments laying off workers, it is hard to justify hiring new state workers, particularly in this case where positions are unfilled.
“We know that these positions generate revenue, “ Millett said, “so it is hard to understand why they have gone unfilled and now they are asking for two new positions.”
Diamond agreed. He said the arguments to add new positions to collect identified overdue tax obligations is undercut by the fact that the state did not fill the positions currently vacant.
“I understand these revenue agents take time to get their collections done, but they are saying two positions will bring in millions of dollars,” he said. “What about the positions that are unfilled?”
The request for the two new positions is one of the issues yet to be resolved by the committee as they work to complete the budget package this week.