Gov. Mills recently rolled out her first biennial budget proposal, to much celebration from most of the Maine press and her supporters alike. The proposal would enact a laundry list of Democratic proposals that were stymied under her predecessor, from increasing revenue sharing to funding Medicaid expansion.
As with all budgets proposed by governors, it is likely to undergo a variety of changes as it winds its way through the State House – even with Democrats firmly ensconced in the majority. Republican Paul LePage’s budgets were frequently radically altered from his initial proposals when Democrats controlled one or both houses of the Legislature, but Democrat John Baldacci’s were changed by a Democratic Legislature as well. As one example, it’s worth going back and looking at John Baldacci’s initial 2007 school consolidation plan as proposed in his budget and compare it to the much more curtailed version eventually passed by the Legislature.
To her credit, Mills did not offer any such shocking, brand-new policy ideas in her first budget. That’s good, because using the biennial budget as a venue for gigantic policy shifts isn’t good governing. A balanced budget must be passed every two years under the Maine Constitution, so the use of it by the Blaine House to force acceptance of radical ideas isn’t the right approach. It can push Augusta into the sort of brinksmanship that we’ve seen all too much of lately, both here in Maine and nationally.
Mills also did not propose substantial tax hikes, which would be completely unnecessary when we currently enjoy a surplus. That’s a relief to see – even if one is willing to acknowledge that tax increases are at times a necessity, they should be reserved for consideration when there’s a budget shortfall. They shouldn’t be floated as a means to change people’s behavior or raise money for new spending. Instead, legislators should always consider cutting spending first to pay for new proposals, identifying programs that could be eliminated or reduced rather than further burdening taxpayers.
It’s also reassuring that Mills did not propose raiding the state’s rainy day fund, as that money should be saved for times of need, not tapped to pay for some pet project.
Mills’ budget plan is hardly ideal, of course.
Under her plan, the state budget would increase spending by over a billion dollars, or more than 10 percent of current totals. Though it may be possible to increase spending that much in the current biennium without raising taxes, minority Republicans are correct to point out that it may not be sustainable in the future.
In Maine, as they do nationally, every new budget sets the baseline for the next budget. That’s why, even though it may spend more money than the state did in the last budget, opponents of a federal spending plan often say it cuts too much: because spending isn’t being raised by as much as was previously anticipated. They’re making an argument based on their expectations of what will happen, just as Republicans and Democrats will in Augusta in the coming months when they debate the wisdom of Mills’ spending plan.
While Janet Mills’ budget is currently balanced, it may be balanced somewhat precariously. Drafting a document as complex as a two-year budget for a state requires a lot of assumptions, and some of those might not pan out. In paying for Medicaid expansion, Mills and her staff have to estimate how many people will sign up for the program and, therefore, how much it will cost. In other states, these estimates haven’t always panned out, leading to cost overruns beyond what lawmakers expected. That’s a big part of the reason LePage opposed it.
The administration faces a similar question in trying to determine just how much money they have to spend. We all do this in formulating our household budgets: We presume that we’ll continue to have the same job and that it will pay roughly the same amount it does now. The state projects future tax revenue in trying to craft its biennial budget, but those projections can be way off if the country faces a major economic downturn, as we did in 2008.
The economy has been doing well lately, both nationally and in Maine, but we can’t presume current trends will continue.
That’s why it would be wiser to hold off on any major spending spree and continue to add to the rainy day fund. Mills’ budget isn’t nearly as fiscally responsible as it ought to be, but hopefully it will be improved by the Legislature, instead of being made even worse.
Jim Fossel, a conservative activist from Gardiner, worked for Sen. Susan Collins. He can be contacted at:
Twitter: jimfossel
Send questions/comments to the editors.
