Sunday, March 9, 2014
Easy out: “It seems like there’s an increasing willingness for the state to solve its fiscal problems on the backs of property taxpayers. They all point fingers and blame the other (party), but that’s what it’s come down to. The easiest way out for legislators is to take actions that are not directly attributable to them.” --Geoff Herman, legislative affairs liaison for Maine Municipal Association (1.5.14)
Herman's said that earlier this month when state lawmakers were anticipating a significant budget gap for the upcoming session. Sure enough last week Democratic leaders announced that there was a $100 million shortfall at the Department of Health and Human Services. And then, late Monday, the LePage administration announced that the state faces a $119 million budget shortfall.
The recent news will intensify negotiations over a possible supplemental plan to fill the gap. Some Republicans are already calling for cuts at the Department of Health and Human Services, cuts that the Democratic majority won't likely support. With that large of a gap, and a potential veto by Gov. Paul LePage -- who isn't participating in the budget process other than to say the books are not balanced -- it's logical to start thinking of things upon which both parties can agree. That's not going to be much, particularly in an election year.
So what does that mean for the budget negotiations?
It may mean that municipal aid is on the chopping block. But haven't Democrats been making a big fuss about how cutting municipal revenue sharing is going to raise property taxes? Yes. That was the key attack against Gov. Paul LePage's budget last year and they're still making noise about it. They're even fast-tracking a bill designed to offset a $40 million cut in municipal aid by scaling back or eliminating corporate tax breaks or broadening the sales tax base. The problem is that there's no consensus around any items that could preempt the automatic $40 million cut.
Last year the prevailing theory was that cutting revenue sharing was a serious political liability for state lawmakers. That was last year. This year, if the Legislature enacts cuts to municipal aid the anticipated effect in higher property taxes, or a reduction in services, many residents wouldn't likely feel the effect until 2015, when cities and towns adopt new local budgets.
By then the 2014 elections will be over and the new Legislature can blame tax increases on the previous Legislature. That's likely a big reason why Herman wasn't optimistic about avoiding another cut in municipal aid.
Sneak: Last year the governor took some heat from the conservative Tax Foundation for including a subtle, but lucrative tax hike in his two-year budget proposal.
The Tax Foundation called it a "sneak tax." Democratic House Speaker Mark Eves said at the time that the change from consumer price indexing to chained consumer price indexing (A bit complicated, but explained here) would disproportionately affect low- and middle-income families.
It flew under the radar, but the tax increase made its way into the state's two-year budget when lawmakers fashioned their bipartisan budget deal last year (search for "chained" in the budget document). The result was an estimated $8.6 million in state income tax collections this fiscal year and in FY 2015, and an estimated $1.5 million in the subsequent years. Maine Revenue Services said last year that the average increase in Mainers' individual tax bills will be $39.
Vetoes: The governor vetoed five more bills last week and allowed 11 others to go into law. The Legislature is expected to take up at least two of those vetoes today.
* LD 963, a bill to increase Maine students' chances of attending college by allowing them to take college-level courses in high school. The bill passed unanimously, but LePage wrote in his veto message that lawmakers didn't fully fund it. (UPDATE: House has just sustained LePage's veto @ 10:40 a.m.)
* LD 1254, which would increase local food from farmers and fishermen in state institutions, directs state-funded institutions to purchase a percentage of food from Maine producers so long as it is competitively priced and available. LePage said the bill was an unfunded mandate. (UPDATE: House overrode the governor's veto @ 11 a.m.; it's on to the Senate).
Alexander Part II: It case you didn't hear, Gary Alexander will be in the Health and Human Services Committee today. Expect a lot of questions about his methodology from Democrats.
Nonpolitical item: "It would be as satisfying as any victory we've ever had if we could go in there and win," -- Patriots Tom Brady on Sunday's AFC championship game against the Denver Broncos.
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Steve Mistler covers politics and government for the Portland Press Herald. He spends a lot of time in the hallways of the State House.