Wednesday, December 11, 2013
Bruce Poliquin is the former Maine State Treasurer and a 2012 Republican primary candidate for the United States Senate. He has 35 years of experience owning and managing businesses. Bruce is a proud third-generation Franco-American Mainer and Harvard University graduate. Visit BrucePoliquin.net for his most recent commentary and analysis on media outlets throughout the State about the important issues facing Maine families and their jobs.
To readers of Making Maine Prosperous,
Because of other obligations, I will not be writing my blog for the next several weeks. Many thanks to all who have followed my research, analysis, and commentary as how to create more jobs for Maine families.
Enjoy the remaining summer!
Best wishes, Bruce
In 2011, the Maine Legislature expanded educational choices for Maine students by allowing the creation of 10 publicly funded charter schools over the ensuing 10 years. Finally, Maine students and their families joined those in 40 other states in being able to benefit from the more innovative and flexible charter programs as compared to most traditional public schools.
This September, five Maine charter schools will open their doors to a few hundred eager K-12 students. Each school successfully satisfied the exhaustive application process managed by the Maine Charter School Commission. Like all public schools, the charters will be closely monitored by the Maine Department of Education for compliance with state academic requirements.
The budding public charter school movement in Maine is supported by growing bipartisan efforts across the country. Today, roughly 2.3 million American students are enrolled in charters. Parents are attracted to the increased accountability for students and to the ability to retain or release teachers based on their performance.
Many charter school students struggle in traditional public schools. Maine’s first charter school, the Maine Academy of Natural Sciences in Hinckley, offers hands-on study in forestry and agriculture for 9-12 graders who find it difficult to learn in regular classroom settings. The Cornville Regional Charter School teaches life skills such as gardening, woodworking and sewing to its K-6 students. This fall, the Harpswell Coastal Academy will send its middle and high school students to local fisheries, forests, and farms to add experiential learning to its standard academic courses.
In 1935, during the Great Depression, the federal government created the critically important Social Security (SS) program to help keep senior citizens out of poverty by providing monthly retirement checks. Today, approximately 55 million Americans mostly aged 62 and older receive pension, disability, survivor, and other social welfare benefits under the SS umbrella.
Last year, approximately $825 billion of benefits were paid, comprising 22% of all federal government expenditures. As baby boomers retire during the next ten years, the number of SS recipients is projected to increase by 40%. Social Security is fiscally unsustainable and must be saved for future generations.
Some of Washington’s most breathtaking financial mismanagement occurs within the Social Security program. Every American worker pays 6.2% of their earnings (on income up to $113,700 per year) into the SS Trust Fund. These “FICA” contributions are normally deducted automatically from worker paychecks. Employers also pay a 6.2% payroll tax and then send both contributions off to Washington.
Even with billions of dollars of payroll taxes streaming to Washington, there is actually no cash in the Social Security Trust Fund to pay the benefits for 55 million Americans. That’s because the United States Congress grabs the SS taxes and spends them before they reach the Trust Fund. In place of the cash, the U.S. Treasury substitutes non-marketable government bonds, or IOUs.
Augusta is not the only state capitol struggling to pay its bills. Public officials in other states have also grown their governments beyond the taxpayers’ ability to pay for state programs and services.
As the economy gradually improves, some states are boasting about current budget surpluses. Looking under the hood, however, one often finds those states with frightening long-term financial obligations. This New York Times article digs into some of the crosscurrents surfacing in state capitols across America.
The two most serious fiscal problems facing state governments today are huge unfunded pension liabilities and unsustainable Medicaid costs. For many years, elected officials promised unaffordable retirement benefits mostly to state employees and public school teachers. Medicaid safety net health care benefits were awarded to younger able-bodied voters in addition to disabled, elderly sick, and poor residents. The pension and health care debts piled up as career politicians seemed to expand their promises with every election.
Richard Ravitch, the former New York Lieutenant Governor, said in the New York Times article “The problems are still there. It’s retirement expenses, generally, and health care expenses — and they’re crowding out other things.”
Decades of research confirmed by real-time observations conclude that dependence on government welfare programs leads to a lifetime of poverty, generation after generation.
Last Friday, the Maine House of Representatives passed a bill aimed at helping to reverse that destructive trend in Maine. To become law, the bill must now be passed by the state Senate and signed by Gov. Paul LePage.
If enacted, the new law would require the Maine Department of Health and Human Services (DHHS) to assess the employment capabilities of those receiving cash welfare payments under the Temporary Assistance for Needy Families (TANF) program. DHHS would then help those beneficiaries train for the workplace and secure a job.
Although the Maine departments of Education and Labor are already working with DHHS to do just that, it’s a good idea to have even more political support to assist impoverished Maine families become more independent, self-sufficient and lead better lives.