Tuesday, March 11, 2014
(Update: Peter Steele, LePage's spokesman, emailed the following statement at 1:01 p.m. --
"The Governor was speaking informally about the revenue surplus at the end of Fiscal Year 2013, which was about $47 million. Adding that revenue to lapsing balances and accounting adjustments, the total surplus was $58 million.
Under state law, surplus revenue is used to replenish the Governor’s contingency fund, the retirement allowance fund and the loan insurance fund at FAME. Surplus revenue must then cascade into specified accounts, such as the rainy day fund, the tax relief fund, the operating capital fund, the health insurance fund for retirees, tax relief fund and the capital construction reserve.
Obviously, the Governor cannot hide any revenue from anyone. 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.")
It's not uncommon for Gov. Paul LePage to make a comment and leave people wondering what he meant.
It happened again Wednesday when liberal blogger Mike Tipping posted his latest snippet from a secret recording of LePage speaking with members of a conservative women’s group at Dockside Grill in Falmouth. In a 23-second clip, LePage claims that he's managed to squirrel away a $47 million surplus without state lawmakers' knowledge.
“The economy as a whole is actually doing pretty well," LePage says. "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's remark triggered demands from Democrats to disclose the source of the surplus. After all, they say, lawmakers are expecting that they'll have to draft a supplemental budget to plug a still undetermined hole in the state's $6.3 billion budget.
Additionally, the Legislature's nonpartisan Office of Fiscal and Program Review recently posted a $6.7 million downward forecast for revenues through August. Grant Pennoyer, director of OFPR, said Wednesday that unreleased revenue figures from September showed $13 million over projections. Stil, unless Mainers scrambled in September to buy a ton of stuff ahead of the Oct.1 sales tax increase (doubtful), a $47 million surplus is a complete mystery to everyone except possibly the LePage administration. And the administration isn't commenting, at least not yet.
It's possible LePage was referring to the rainy day fund, which drew in $47 million at the end of the last fiscal year. But everyone in Augusta knows about that.
So, is it possible LePage keep secret a $47 million surplus? It wouldn't be easy. Marc Cyr, an analyst with the fiscal office, said it's possible that the LePage administration plans to spend $47 million less than agencies were budgeted last year. In other words, state agencies -- one or several -- requested a certain amount of money for the current two-year budget, but will end up spending far less to achieve the surplus.
"It's hard to say what he's got in mind," Cyr said. "He would have more knowledge about what's going on within his agencies than we (the Legislature) would."
Cyr also noted that communication between the fiscal office and the executive branch isn't what it once was -- a reference to LePage's icy relationship with the budget-writing committee. Democratic lawmakers in particular have been vocal critics of what they believe is the administration's deliberate withholding of information.
Cyr added that it's uncommon for state officials to talk about a surplus until the end of the fiscal year, in this case June, 2014. That's because expenditures ebb and flow within an agency, particular more volatile departments like the Department of Health and Human Services (DHHS, coincidentally, has mystified lawmakers with shortfalls in the Medicaid program.). There is a potential political benefit to waiting until the end of the fiscal year to announce a surplus, particularly in 2014, a gubernatorial and legislative election year.
Pennoyer said it would be difficult to accumulate a $47 million expenditure surplus. After all, he said, the administration has already proposed $35 million in agency-wide reductions, both in education funding cuts and the management of staffing vacancies.
Steve Mistler covers politics and government for the Portland Press Herald. He spends a lot of time in the hallways of the State House.