June 16, 2013

Dan Demeritt: Maine's state budget writers found the 'sweet spot'

Making the hard choices that are on display in this budget show what it means to govern.

The budget that passed the House and Senate last week is dismal. It is a package that taxes too much, funds too little and falls far short of accomplishing what anyone would want on just about everything.

But the budget is reality in a world of economic scarcity. We have infinite hope for what government can accomplish but finite resources. The budget is where rhetoric and political wants have to give way to the real and our most vital needs.

The budget is governing. The budget is hard choice. And the Legislature's Appropriations Committee, led by Sen. Dawn Hill, D-York, and Rep. Peggy Rotundo D-Lewiston, did exactly what they needed to do for Maine.

Sen, Patrick Flood, R-Winthrop, serves on the Appropriations Committee and was the House chair of the panel when his party held the majority in the 125th Legislature. He is a veteran of eight budgets and professes that this was the toughest. Yet he is proud of the process, proud of the product and is extremely complimentary of his fellow panelists.

He should be.

Flood uses the term "sweet spot," to describe the objective of appropriators. It is about finding a package that can earn the vote, if not necessarily the full-hearted support, of two-of-every-three legislators.

It is arduous work in a building where opinions are strong and disagreement can be found at every turn. Over the course of three months, appropriators considered policy and spending issues that could stand alone in hundreds of separate bills. The task at hand was the consideration of every individual idea or expenditure in the broader context of a budget the taxpayers can afford. Their objective was unanimous agreement.

They did it.

Every vote cast as the Appropriations Committee drafted its budget was unanimous. Across party lines they worked every issue and settled every dispute until they could agree. It is governing at its best and the budget they produced is everything we could have hoped for given these tough economic times.

I get why many Republicans voted against it in the House and Senate. The budget includes tax increases they wanted to avoid. I understand why Gov. LePage will likely veto it. He is a leader with a style and a vision that works for him, and as the hospital debt victory demonstrates, often works for Maine.

But I also understand why Flood, pragmatic GOP leaders like Sen. Roger Katz, R-Augusta and Republican House leader Ken Fredette as well as up-and-coming Republicans like Reps. Matthew Pouliot and Corey Wilson, both of Augusta, voted yes.

This budget temporarily adds half a cent to the sales tax. It also increases the meals and lodging tax by a full penny. But it preserves the historic income tax cuts enacted in the Republican-led 125th Legislature. If growth is your goal, and how could it not be, it is far better to tax consumption rather than income.

The budget also restores $125 million in municipal revenue sharing that had been eliminated in the governor's original budget proposal in February. From where I sit, a reduction in state revenue sharing does not have to lead directly or irrevocably to higher local property taxes. Admittedly, not many of us hold this point of view.

I would also concede that the realignment of municipal services and government infrastructure needed to achieve greater efficiency is a process that is far bigger than any single budget cycle.

Still, this budget provides a great example of the dividends earned from hard choices. About $300 million is saved over the upcoming biennium because of the pension reforms enacted under Republican leadership two years ago.

From a Republican point of view, this budget also makes important structural reforms. It begins moving the cost of teacher retirement from the state to the local level where spending decisions are made.

It advances the cause of charter schools by funding positions on the Charter School Commission. It also sets up a panel to consider whether nonprofit institutions should be subject to local property taxes.

More structural reform and hard choices are going to be needed in the future because Maine continues to confront grim economic and demographic realities. State revenues are flat because prosperity and economic growth remain all too elusive -- data released earlier this month confirms that income growth in Maine is the second lowest in the nation.

Federal government support for Medicaid continues to decline, putting more pressure on state taxpayers.

All the while our aging population means fewer workers and more pressure on entitlement programs.

This all means that Flood's legislative "sweet spot" will get smaller and harder to hit in years to come. Nevertheless the example set by the men and women serving on the Appropriations Committee shows that committed and thoughtful leadership can find a path forward no matter how dismal things get.

Dan Demeritt is a Republican political consultant and public relations specialist. He is a former campaign aide and communications director for Gov. Paul LePage. He can be contacted at:

dan@win207.com

Twitter: @demerittdan

 

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