Wednesday, April 23, 2014
AUGUSTA – Days after Gov. Paul LePage said a state government shutdown would be less painful than the Legislature's bipartisan budget compromise, LePage's finance chief offered a grim outlook on another shutdown.
Sawin Millett, Maine's commissioner of administration and finance, remembers the government shutdown in 1991.
Joe Phelan / Kennebec Journal
Sawin Millett, the commissioner of administrative and financial services, was involved in the shutdown of Maine's state government in 1991.
"(That) was not a year I want to go through again," he said Monday.
Millett was Republican Gov. John McKernan's finance chief when the Democratic-controlled Legislature and Republicans reached a budget impasse that halted state services for 16 days.
Asked Monday about the potential effect a shutdown this year would have on Maine's bond rating, he said, "I don't think any of us here in this department or at my level would see that as a likelihood."
Millett was asked to clarify whether a shutdown or a drop in Maine's bond rating is unlikely. That's when he said he isn't eager to relive 1991.
Millett didn't give a complete answer, but he did say he expects the governor to veto the $6.3 billion budget that the Legislature passed by wide margins last week.
Millett, who was instrumental in crafting the two-year budget that LePage proposed in January, said he has no "plan B" if the Legislature's plan does not become law.
The governor has until June 25 to sign or veto the budget. To avoid a shutdown, the state needs a balanced budget enacted by June 30, the end of this fiscal year.
Democrats, who hold the majority in the Legislature, are hopeful that most Republicans will support the budget compromise. The plan was crafted in the predawn hours and approved by legislative leaders on June 7. It moved quickly through the Legislature last week.
LePage and a contingent of Republicans object to the plan's inclusion of a temporary sales tax increase, from 5 percent to 5.5 percent, and an increase in the meals-and-lodging tax, from 7 percent to 8 percent. Both would end after two years.
The governor has been lobbying Republicans to reject the deal, but so far the compromise has held and gained the support of two of the four Republican legislative leaders.
A veto override -- and enactment of the budget as an emergency measure -- requires support from two-thirds of the lawmakers voting in the House and Senate.
The prospect of a shutdown has loomed over much of this legislative session. But the current Legislature is farther from that outcome than lawmakers were leading up to the shutdown 22 years ago.
In 1991, a group of 13 Republican senators blocked the Democratic-controlled Legislature's attempt to pass the budget, triggering raucous protests at the State House by state workers, who suddenly stopped getting paychecks.
Republicans and McKernan had pushed hard to include workers' compensation reforms in the budget. Democrats resisted the reforms and their proposal relied on $300 million in tax increases.
McKernan said the tax increases were a non-starter and in late June he issued an emergency order declaring that only vital services such as corrections staffing and state police could continue if his budget proposal wasn't enacted.
Unlike the current budget compromise, the 1991 budget lacked two-thirds support on enactment. Lawmakers tried to pass a stopgap, one-year budget, but McKernan vetoed it, calling it a "sham."
This year, Republicans' resistance to the budget compromise has been less vocal, but pressure could be building to oppose it. Activists have posted the names of Republican lawmakers who voted for the budget on conservative websites.
On Monday, the Distilled Spirits Council of the United States urged LePage to veto the bill on behalf of the state's hospitality industry. The group specifically objected to the increases in sales and meals-and-lodging taxes.
Americans for Prosperity Maine, a conservative advocacy group, also urged lawmakers to oppose the budget, saying the tax increases could become permanent.
Millett said Monday that a new budget must be enacted for the state to authorize about $104 million in voter-approved bonds. LePage has said he will release the bonds as soon as lawmakers pass his plan to pay Maine's hospitals $186 million in backlogged Medicaid reimbursements.
The hospital plan has been the subject of constant political wrangling in this session. It was passed and signed into law by LePage last week, leading some Democrats to question when the governor will release the bonds.
Millett said that as the end of the fiscal year draws near, the state must get a new bond rating before authorizing bonds to fund transportation and infrastructure projects.
On Monday, state Treasurer Neria Douglass urged LePage to sign the budget quickly, saying that "rating agencies and financial markets will not look favorably on his actions if he delays or vetoes it."
Steve Mistler can be contacted at 620-7016 or at: