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Back in 2015, American Express conducted a survey. They found that about 30 percent of Americans had hard, physical currency — coins and bills — hidden away in their house. With Millennials? Two-thirds had a cash cache.
A different poll found the freezer was where most hiders hid their dollars. The more famous “cash under the mattress” trope? A distant third.
But I’ve got a secret. The State of Maine has cash hidden as well. Or, at least it did.
One of Gov. Paul LePage’s greatest legislative achievements was repaying the longstanding debt owed to Maine’s hospitals. That debt grew because government-provided health care programs were expanded substantially without a sufficient increase in budgetary funding.
Augusta sent IOUs instead.
That became a major issue in the 2010 election, which led to a Republican takeover of both the Maine Legislature and the Blaine House. During that period, the GOP got to work on issues as varied as pension reform, health insurance coverage, and tax decreases.
Paying the hospitals was front of mind, but there weren’t hundreds of millions of extra dollars laying around as LePage took the reins from Gov. John Baldacci.
However, one source of revenue the LePage administration saw was the fabled “liquor contract.” Twenty months into office, a plan was hatched to leverage liquor sales to make good on hospital payments. It led to headlines and intrigue in Augusta as the then-governor teased the plan — sans details — as an October surprise.
I know because I was there.
LePage ultimately didn’t call the Legislature into a special session and Democrats retook the Legislature. That meant the Democrats could choose the next attorney general.
They chose Janet Mills.
Here’s the secret: The LePage plan stashed a growing pile of money away outside of the normal state budget in a lockbox kept with the Maine Municipal Bond Bank. This wasn’t the rainy day fund; it was a “horrific monsoon” fund.
Mills announced last week that she would break open this piggy bank — it has grown to nearly $77 million — to help with Maine’s current COVID budget woes. That money came from the state-owned monopoly on liquor sales. It is a prudent time to use it.
Yet there was another cash stash put into place by Republicans that, unfortunately, has already been raided. And Sara Gideon is taking all the credit.
When the GOP took the State House in 2010, Republicans passed a bill that sent “excess” tax revenues into a special fund. When the balance grew big enough, Mainers would see their income tax rates decrease for future years.
Yet, last year, Gideon raided this fund to claim she “fought for property tax relief.” Her bill sent out checks to certain homeowners. A nice gesture. But rather than real, enduring, thought-out tax policy, it is a gimmick; when the pot grows big enough, Augusta might send a check in the future.
Best of luck planning for that.
This study in contrast between Mills and Gideon is clear. The former worked as attorney general to get the best result for Maine, even if it brought her into conflict with members of her party. It has now paid dividends, giving the state even more cushion with which to weather the COVID storm.That provides an opportunity to make good policy.
The latter took a cash stash created by Republicans and emptied it on a one-off basis. And is now using that as campaign fodder.
But Janet Mills isn’t on the November ballot. Instead, Gideon will face another woman who often works to get the best result as she sees it, even if it brings her into conflict with members of her party.
And Susan Collins is in line to be the chair of the Senate Appropriations Committee if she returns to Washington.
It’s a great position from which to stash cash, be it the freezer, the mattress or the Maine economy.
Michael Cianchette is a Navy reservist who served in Afghanistan and in-house counsel to a number of businesses in southern Maine. He was a chief counsel to former Gov. Paul LePage.