Question: Would you invest in a company whose auditor said that there were “inadequate controls over cash management?” How about if the examiner added that “expenditures were included twice” and that there were “overstated expenditures?” Would you trust a company whose audit report said that it “only partially claimed certain payroll expenditures” and that “cash was drawn in excess of expenditures?” Would you feel confident in a corporation found by inspectors to have “inaccurate federal financial reports?”
Of course not, not if you could help it. The problem is you can’t help it – none of us can – because this “company” is the State of Maine. Through our taxes and fees, we have no choice but to “invest” in state programs and pay for state services.
These quotes and many more like them come from the state’s most recent audit report and again illustrate Maine’s deplorable fiscal condition. The report for the previous year is almost identical. This is why our credit-worthiness has been downgraded by the three largest bond rating houses this year. This also is why investing guru Jim Cramer of CNBC’s “Mad Money” said on a recent radio interview, “If Maine were a stock, I would be selling!”
No business in the real world could get away with this scandalous accounting. Enron, WorldCom and a few others tried it and their CEOs are now headed to jail.
The enormity of our state’s fiscal mismanagement has, except for little tidbits, been kept from the public eye. The majority party’s recent proposal to borrow hundreds of millions of dollars to pay for current expenses was an eye-opener for many Mainers, but the issue, for the most part, was quietly put to rest. The alternative to this preposterous proposal was – what else? – to raise taxes on the Maine people who are already the highest-taxed people in the country.
We are told by the Baldacci administration that “spending in this state has increased by the smallest amount in decades.” But using non-partisan information from the state’s own Office of Fiscal and Program Review, we can see that this administration has increased spending, as well as taxes and fees, far more than they admit to. The reason they feel they can get away with this erroneous statement is that they have moved certain budget items “off line” so they don’t appear as expenditures or revenue increases. It’s kind of like going to the bank for a loan and not telling the loan officer about your car payment. It makes your bottom line look better. But it is not reality.
It is no wonder that Maine people are cynical about their government. Maine has become the poster child for government inefficiency and fiscal foolishness. It is a case study in how to get the least from your government for the most tax and fee dollars.
“Honesty in government” does not have to be an oxymoron. We can have an open, nonpartisan and transparent reporting and discussion of our state’s finances. We can have realistic appraisals of departments and programs. In a democracy, we should know how much tax and fee money they take in and where every penny goes. We can replace the accounting gimmicks with generally accepted accounting practices, and terminate state employees, from the governor on down, who perpetuate these deceptions.
Until that day comes, we feel that it’s our duty to expose these accounting gimmicks, this abysmal management, and the intentional political profiteering through the state budget.
We believe the vast majority of Maine citizens have virtually no understanding of how government works or should work. It is these carefully designed walls that allow special interests, and a few in powerful political positions, to control the current destructive direction of this state.
We believe Maine government needs comprehensive change in its financial dealings and in its leadership. Positive change can only come from a government that is honest, open and understood by those it is supposed to govern.
Rep. David Trahan is a fourth-term legislator from Waldoboro. Rep. Jonathan McKane is a freshman legislator from Newcastle. This is the first in a series of columns the two legislators are doing for weekly newspapers on financial mismanagement. More columns will appear in this paper as space allows.
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