Will state legislators push Maine backwards?

At coffee shops and family gatherings across America, there is a spirited debate about the appropriate size and cost of government at every level. We all agree that public roads must be plowed, our children educated, and the country defended. However, should government also provide, for example, health care for able-bodied 19 and 20-year-olds, and buy laptop computers for public middle school students?

Big government is expensive. Property, sales and income taxes pay for government programs and services. Struggling through the worst recession in 70 years, most American families cannot afford to give up more of their hard-earned money in taxes to fund what many believe is government overspending.

In Augusta, the Maine State Legislature is scheduled to adjourn in less than three weeks. Before then, it is required by law to pass a balanced budget where state spending equals projected tax collections over the next two years from mid-2013 through mid-2015. Right now, spending is calculated to exceed tax revenues by $800 million.

In January, Republican Gov. Paul LePage submitted to the Legislature a proposed balanced budget which includes spending reductions but no tax increases. Last week, the Democratic majority in the Legislature responded with a planned $400 million tax hike, the largest in Maine history, to help close the budget shortfall. In addition to rolling back their own bipartisan income tax cuts passed in 2011, the legislative majority now proposes increasing sales, meals, tobacco and other taxes rather than reduce spending.

The final decision by our elected officials will impact every Maine family and small business. Will we Mainers once again lose more of our paychecks to fund government overspending? Or, will we be allowed to keep more of what we earn because government is able to control its appetite to spend?

As this critically important debate progresses, I suggest all parties consider the accompanying graphic. It shows that each year Maine state government already spends the 16th highest dollar amount per resident on government services as compared to all 50 states. Maine also spends more per person than the average of other rural states. To fund that overspending, Mainers pay the 9th highest tax burden in the country. In other words, we pay the 9th highest share of our mostly low-wage incomes for state and local taxes.

By any objective measure, Augusta has been overspending for a long time. That’s why it lurches from budget crisis to budget crisis nearly every year. In past years, the governor’s office and the Legislature relied on accounting gimmicks to “balance the books.” Hundreds of millions of one-time federal stimulus dollars were used to plug budget holes and maintain unsustainable programs, like our Medicaid welfare program, called MaineCare. Thirteen thousand state employees were sent home without pay for 10 or so days during the year to “save” money. Maine hospitals were not fully paid for health care services provided to our huge Medicaid population, resulting in today’s enormous $484 million hospital debt.

During my term as state treasurer, I and other government officials with real- world business experience criticized the use of gimmicks to balance the state budget. At least for now, it appears that those financially imprudent practices are behind us.

Going forward, it would hurt Maine families if the State Legislature raises taxes to help balance the budget. For the 2000-10 period, the nonpartisan Tax Foundation calculated that the ten states with the lowest tax burdens had, on average, greater population, employment, and personal income growth than the ten highest taxed states. For many years, Maine has been among the highest taxed states. For too long, our deserving families have suffered low wages and slow income growth because Maine’s high taxes, in part, drive away business investment and jobs.

Right now, our state legislators have an opportunity to help struggling Maine families. Instead of pulling more tax dollars from the pockets of hard-working Mainers, the state Legislature should stop overspending, live within its means, and right-size our unaffordable state government.

Lower, not higher, taxes will help attract business investment and more jobs. Making it easier and less expensive to live and run a business in Maine will lead to more financial security and better lives for our citizens. The resulting economic growth will generate the tax revenues we need to take care of the most disadvantaged among us. Following this common sense path will be good for Maine.

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.  Follow Bruce on Facebook  at www.facebook.com/BrucePoliquin and on Twitter at www.twitter.com/Brucepoliquin.

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Comments

Jason Theriault's picture

Critical thinking

See, here is why it's good to use critical thinking and some scepticism.

Here's a link to the Kaiser Foundation's page with the data for Mr Poliquin's graph.
http://kff.org/other/state-indicator/per-capita-state-spending/#note-2

Here is the data:
Nevada $3,068
Florida $3,300
Texas $3,703
Idaho $4,078
Indiana $4,112
New Hampshire $4,152
Georgia $4,174
Missouri $4,262
Alabama $4,307
Arizona $4,330
South Carolina $4,389
Tennessee $4,483
South Dakota $4,692
Illinois $4,727
Michigan $4,832
Kansas $4,923
Washington $4,995
Ohio $4,996
Virginia $5,096
North Carolina $5,112
United States $5,251
Nebraska $5,260
Pennsylvania $5,362
Utah $5,424
New Jersey $5,433
Connecticut $5,510
California $5,532
Minnesota $5,681
Maryland $5,734
Oklahoma $5,760
Iowa $5,790
Kentucky $5,978
Montana $6,114
Mississippi $6,161
Colorado $6,177
Maine $6,216
Louisiana $6,427
New York $6,654
Arkansas $6,832
Wisconsin $7,049
North Dakota $7,203
New Mexico $7,404
Rhode Island $7,420
Vermont $7,458
Massachusetts $7,701
Hawaii $8,048
Oregon $8,497
Delaware $9,711
West Virginia $10,985
Wyoming $13,585
Alaska $13,741

Now, taking all those numbers(except for the United States figure), adding them together equals $302,578.

Dividing that by 50 equals $6,052, not $5,251. Now, if there were 58 states, with the 8 "Phantom" states spending nothing per person, you would get $5,251.

So, maybe having a former Treasurer who can't do math or is too careless to check his figures is as much a part of the problem as our "problem spending".

I tend to ignore Mr

I tend to ignore Mr Poliquin's columns because tax cheats have no credibility in my book. His numbers rarely add up because he ignores those that don't confirm his Tea Party sympathies and he skews the rest in his favor. I find it hard to believe the SJ willing to print his drivel. Oh wait, they print Cal Thomas too.

Jason Theriault's picture

BTW

If I'm wrong or missing something, please point it out. I'm man enough to admit when I'm wrong, and for the life of me I can't figure out how they missed that.

Jason Theriault's picture

I FIGURED IT OUT!!!

Hahahahahahaha, they f-ed up....
If you look at the data referenced by Kaiser, it used this report as the basis for how much each state spent:
http://www.nasbo.org/sites/default/files/State%20Expenditure%20Report_1.pdf

It breaks up the states into 8 regions, and uses a row to break up each region(here is a image of the top of the table):

Now, as I pointed out earlier, their number works if you divide the sum total by 58 states.
50 states + 8 regions = their mistake.
They included the regions in their calculation.

Well, I feel better knowing how they screwed up

JERRY ARIPEZ's picture

Bingo

Jason, you hit the bell....The moron Bruce fails as a treasurer and somebody ought to go and audit the books he messed with.

It was a good thing he never got elected, Harvard would've had to remove his degree....

Steve  Dosh's picture

Will state legislators push Maine backwards?

Bruce ? Sunday night
A: No
Nice column
It's usually two steps forward ,one step backwards in a real , working , representative democracy . Democracy is expensive and messy sometimes
Despotism , fascism , dictatorships , cults of personality ( Evita Perón ) , para-military states ( Asia ) . gerintocracies ( North Korea ) , directed capitalism ( Red China ) , cleptocracies ( Russia ) , monarchies , kingdoms ( most , if not all muslim states with the notable exception of Turkey ) are - all - much more efficient and much cheaper in the short run
Which would we rather have ?
The answer is obvious • /s , Steve

CLAIRE GAMACHE's picture

Maine spends more

I also take exception to the statement that Maine spends more. I have to wonder what they are using for statistics. Usually the states they compare us to have low taxation on the state level but get huge federal subsidies. Florida for example, sugar and agricultural and hurricane money. Texas gets nearly 40 billion a year in oil, military contracts, agricultural and clean energy subsidies. Mississippi and Louisiana get hurricane relief, agricultural money and military contract money. Corn belt states and meat producing states get agricultural money, that food stamp money that everybody complains about and money for developing energy. And that doesn't even touch the pork their congressional delegations always bring home. In Maine we like to give back federal money because we are too principled to take tax money to help poor people. I think if you are going to talk about how much tax money is collected and spent you need honest figures that include everything.

FRANK EARLEY's picture

How can they do it??????

I would love to spend the same money I did ten, twenty, thirty years ago. I remember cigarets for fifty cents a pack, I could put five dollars worth of gas in my car and drive for a week or so. I bought a house, brand new for forty grand.
Nowadays, five dollars worth of gas, wouldn't fill the lawnmower, cigarets aren't fifty cents per pack anymore. Try finding a decent house for forty grand to buy nowadays. The fact of the matter is, everything is more expensive today, than it was five years ago.
Check out what the, in hospital, cost of having a baby was thirty years ago, and what it cost's today. That's just one I happen to know. Try comparing grocery cost today and ten years ago. It cost more to register your car than it used to, hell it cost ten times more to buy a car than it did twenty years ago.
Just how does anyone expect to pay less in today's economy and still get the same bang for your buck. I would love to spend less today than I do, unfortunately, that won't work. It's not possible.
It;s a complicated problem, requiring a complicated answer. This constant bickering like little children is not going to accomplish anything. I'm sure the ultimate solution will require input from all sides of the isle, therefore, the Republican blockage of everything will drag this State backward, and make us a laughing stock to boot.......................

RONALD RIML's picture

Struggling Maine families keep buying tobacco and

lottery tickets.....

Does that sound like they're screaming for 'tax relief?'

CLAIRE GAMACHE's picture

Austerity

Every single underpinning of the so-called research that supported the notion that reducing taxes and services and shrinking government would bring prosperity has been proven false and been discredited by reputable economists. Never mind the example that has been brought to us in Europe which is looking at an average of 25% unemployment. The only people still believing in this theory belong to the "flat earth society", the climate change denier's club and the group still looking for Obama's birth certificate. This is not to say we should not weigh carefully how we spend tax money, but cut, cut ,cut as economic policy is a figment of somebody's hallucinations. And it puts more cash in the pockets of those who need it the least and who contribute the least to economic stimulation.

Jim Cyr's picture

WOW !!

Tax,tax,tax, Spend,spend,spend, will bring about economic stimulation according to your "reputable economists"? How has that been working so far with the Fed budget in the red to the Fed with over 17 Trillion? And just who do you think is providing jobs ? Certainly not poor people !!

Worked pretty well in the

Worked pretty well in the 90s... And out greatest economical expansin happened int he post-WW2 years, when taxes were four times what they are now.

CLAIRE GAMACHE's picture

Trickling

There is no business that I know of that will hire people if there is no demand for the product they are selling. Unless there is demand the profits go into the offshore account. Businesses also got very smart about making do with fewer employees during the last economic downturn and they continue to invest their profits in technologies that allow them to eliminate more employees. That is why there are no statistics anywhere in the world which will substantiate that giving tax cuts, incentives and subsidies to large corporations will help to reduce unemployment. It just creates PAC funds for congressional candidates. It is a different story with small businesses and entrepreneurships as they often do not make it at all without outside help with funding.

CLAIRE GAMACHE's picture

Tax and spend

The fallacy in the austerity argument is that they looked at statistics that said that states that spent more had more unemployment. That is a chicken or the egg argument. States spent more because they had high unemployment and deeper recession and since our national deficit is coming down rapidly to the level of the Bush administration and unemployment is also coming down, with the greatest increases in the private sector, that would seem to indicate that economic stimulation from the government if it is done correctly, in the right amount and at the right time is the way to get out of recession. In Europe they cut, cut, cut and didn't spend, spend, spend and they are in their seventh or eighth round of recession and have 25% unemployment. Nobody is saying the government should be Santa Claus but it should be smart. The statistics supporting austerity are bogus and the folks selling it are selling snake oil. The point that we would have come out of it anyway is unproven and it is just as valid to say that we would have come out of it sooner if the Republicans had not obstructed every attempt to stimulate the economy. In fact economists are now saying the recent Sequestration cuts are damaging the recovery.

RONALD RIML's picture

Huh?? Austria averages 7.5% unemployment....

Germany is 5.3%

France is 11%

Where is the 25% you claim, Claire???

CLAIRE GAMACHE's picture

the 25%

That figure came up in several recent articles about the study done by two economists which was widely quoted by conservatives in their defense of austerity. That study has been examined and debunked. That figure stunned me too which is why I remembered it but it did not come as that much of a surprise. First of all Germany has been the primary architect of the austerity policies for the EU. France has been right behind them so it is not surprising that they are not suffering from it. The figure given did not cite any specific country other than to say European so I assumed it to be an average of all the European countries. Given that , it's not all that surprising.

RONALD RIML's picture

Claire - next time simply post a link to the 'Study'

when those claims are made....

Steve  Dosh's picture

Friends , Sunday night 18:25

Friends , Sunday night 18:25 hst ?
Whelp , i haven't followed all the ins and outs of these argument fully but Europe is in the crapper right now and the ¥en is trading at > than 100 to one . Vacations in Japan and Europe ( esp . Greece and the other PIGS ) are cheap
Macroeconomics 101 - when America sneezes , the rest of the world catchs a cold
What they all are finding out is what John Maynard Keynes prescribed for ailing economies in the 20's -- you gotta' spend some money to make money . That is what the Chinese are not doing . They are hoarding US greenbacks . They need to buy more US grains ( rice soybeans and corn ) , Boeing ® jets and Caterpillers ® 
When the economic pie gets bigger there's a larger slice for eveyone
It is not a zero sum game where if you are getting a bigger slice i must be getting a smaller one
It's what Roosevelt did to get us out of the Great Depression with the WPA , CCC , lend - lease ( to Britain ) and other supposed ' make work ' projects and programs that we all benefit to this very day , right now . i include WW II on that list
Luckily for US we hold the purse strings on all US$Dollars . We print them
Have you ever seen a Yuan or a Renabi ? No . Of course not . It's the offical communist chinese currency . Nobody wants it hth ? Steve

JERRY ARIPEZ's picture

In 1973

Yen was 300 to 1 and times were good in Japan and Okinawa as an 18 year old.... 8>)

RONALD RIML's picture

I remember 360 to 1 as I ate Kobe Steak.....

:)

JERRY ARIPEZ's picture

Mouth

Watering Kobe, ah Oui...

JERRY ARIPEZ's picture

well

said Claire...

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