State spending has increased

The Sun Journal’s Sept. 1 editorial (“Facts show state spending really is down”) took umbrage with my critique of state government spending increases because federal funds received by the state were included. The editorial seemed to suggest that federal funds are not real dollars and should not be considered as spending or the concern of the governor and Legislature.

While federal spending these days does seem to be unrealistic, the dollars, nonetheless, are real. It would be irresponsible for the governor and Legislature to ignore their accountability to effectively manage and audit those expenditures. Contrary to the political posturing that encourages people to believe that state government has made Draconian cuts in spending, any examination of the facts show otherwise.

Let’s look at what has occurred in the past eight years.

In 2002, the General Fund expenditures were $2.584 billion. In 2010, General Fund expenditures were $2.866 billion ($283 million more per year than 2002). During the eight-year time-frame, General Fund expenditures peaked at $3.084 billion in 2008 ($500 million more per year than in 2002). While 2010 General Fund expenditures were lower than the peak years, spending was still significantly greater than 2002.

The editorial correctly identified that many of the state budget “cuts” were simply a pass-along to other levels of government. The “cuts” made to the General Fund expenditures should be more appropriately described as “cost-shifts.”

That cost-shifting tactic can best be seen in the costs passed on to property taxpayers via the reductions made to municipal revenue-sharing and Homestead Exemption, in addition to the default on the 55 percent K-12 education funding commitment.

In addition, health care providers also felt the impact through unilateral reductions in compensation rates for services provided through the state-run MaineCare health care program.

A closer look at other special revenue fund expenditures shows an even more significant spending increase. In 2002, expenditures were at $826 million. By 2010, spending had increased to $1.418 billion ($592 million more per year than in 2002).

While the editorial was correct in highlighting that federal funds had increased significantly in 2010 as the stimulus money flowed into state coffers, it is important to recognize that the other state spending categories also have increased significantly during the eight-year period.

In the final analysis, the money that state government spends comes from the same source: taxes and fees. The facts show that state government spent $7.726 billion in 2010 as compared to $5.393 billion in 2002. By any measure, that is a significant spending increase.

State Rep. Ken Fletcher, Winslow

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Comments

thinkingman's picture

nope!

Wow, thats a stretch, i think the HEADINE referencing the state and the BODY and CONTEXT of the letter being about the state trumps your peon claim that because it mentions federal spending....what a stretch even by your vivid imagination....but then again, no surprises here folks....

candiceanne's picture

One might be interested in

One might be interested in knowing that Patty and the others of the editorial staff who do such a fine job proofreading and headlining the news articles also write the headlines for the ltte not the ltte author. This probably explains why so frequently the headline and the ltte don't jive, like some other situations we are all far too familiar with.

Woody's picture
verified

Malfunction

When I press the edit button to correct the spelling of correct, the computer tells me I'm not authorized to edit my statement. So I guess this is the only way I can correct the word "correct." It should be spelled correct. Sorry.

Woody's picture
verified

Say what?

Mr. Fletcher says the editorial was wrong, then says, in every other paragraph, "While the editorial was carrect..."

Hooray for term limits.

jalbrecht's picture
verified

Didn't the Republicans add $6 trillion to the deficit in the

previous 8 years (2002-2009). I think so. Unpaid for wars, Medicare Part-D, $2.1 trillion in tax cuts for those earning over $250,000 a year. All of you out there received your tax cut didn't you? You know the ones that let you eat out at McDonalds once more a year with your family while those earning $250,000 a year got to buy a new BMW. Yes that's the one. Are you enjoying te $55,000,000 tax cut Democrats passed last year? Oh! that's right. That's the working & middle class tax cut that the Republicans defeated last fall.

candiceanne's picture

Who has been in control of Congress and the Legislature?

It would be impossible for the Republicans in Maine to over spend anything in decades since they have been greatly out numbered and rarely even been in the Blaine house not that the governor gets to pass spending. At the federal level, the democrats have been in control of both houses of Congress by a wide margin for nearly 4 years including the last two Bush years and the two Messiah (also a Democrat) years, so lets put credit where credit is due jalbrecht. The Democrats in Congress have been voting the spending and voting VERY, VERY, BIG SPENDING with a whole new meaning.

jalbrecht's picture
verified

Next thing you know the republicans will be adding in money

the UN spends in Maine.
Maine legislators and the Governor are responsible for what they spend and the laws they pass only. And they have cut spending by almost $1 billion since 2001.
Second, you'd think that government should spend more in the middle of the worst recession in 80 years. You know the other Republican Great Depression. Or did they expect we'd allow Americans to starve in the street. They are always talking about traditional values (really the values of the 1950's not our real traditional values). Maybe they want to go back to the values of 1300's in Europe and have people paid to collect the dead in hand pulled carts.

thinkingman's picture

jalbrecht, it amazes me how

jalbrecht, it amazes me how often when the state is clearly shown to be mismanging its money and spending at a horrifucly rapid pace, you simply divert the conversation to the federal level...please stay on point with the LTTE which was regarding the state, not fed. If you want to make a case for the fed, write your own letter to the LSJ, I'm sure your 30 days from last publishing are up.

tron's picture

The first two paragraphs of the letter specifically reference

FEDERAL spending, so I vote that his is completely on point. sorry, you lose, again.

thinkingman's picture

and a later paragraph

and a later paragraph mentions a General, but that doesn't mean this is an article about a military brass and their actions....

thinkingman's picture

and it was federal FUNDS not

and it was federal FUNDS not federal SPENDING....do you need help with reading comprehension again?

thinkingman's picture

So because inflation was up

So because inflation was up its okay to keep spending more money in a down economy? I'd argue that the states excess spending helped increase the inflation rates - they are always top payer for services...poor argument at best. Mr. Fletcher, be prepared for an onslaught of all the liberal loonies who fear you might tackle their gravy train next!

candiceanne's picture

You do not sum the inflation for each year to get the total

Tron II, AKA Veritas, added the inflation numbers for each year together to get this crazy number folks, that is not how you calculate inflation from one year or period to a distant one. For example, we get told at the end of each month how much inflation was that month, we are also given quarterly numbers, the quarterly is not the total of the three months individually in the quarter; it is the difference between the beginning of the period and the end. If you use Veritas method all no one would by T Bills because we would be loosing our shirts.

veritas's picture
verified

Sorry, candiceanne...

That figure came right from the Government Inflation calculator. Computed directly from May 2002 through May 2010 - and not as you allege. Sorry.

thinkingman's picture

Todays Economic Lesson for Veritas

Lets explain this for you....first the inflation rate is based on the CPI - consumer price index - that is what we pay for goods and services. While home and auto prices have been stagnant or down, retail goods have been increased in price over the past few years - due to the cost of raw materials increasing and labor costs including increasing health insurance costs to the employer. That all calculates in to what they have for expenses and set the cost to sell their product at. While a simpler mind might think the homes sales lowered figures would make inflation go down, because people only buy one house in 20 years on average, it evens out over such a long term to have no effect, but products purchased often have a greater effect, even at a lesser price point, such as weekly groceries and other household staples
.
As to the state - I don't see them buying ANYTHING at the same price of the consumer, in fact if you look at what they reimburse for Medicaid to physicians, what the bids have come in on for work (remember yesterdays lesson)....the state pays less now than it did a few years ago for the same services. I'd be willing to bet if you looked at the cost of projects of similar size, or what was paid to physicians and hospitals and could equalize the same service you would see a deflationary number, not an inflationary one. Your argument has no legs in todays economy, the state is in fact its own economic engine and its spending more in a deflationary market, meaning its spending even more than we realize and not getitng the benefits of the savings they could have by only pruchasing at the same level/quantity as past times.

Tomorrows lesson will cover the news out shortly that unemployment claims dropped by 27,000 in August and how thats a bad thing - but here's a hint - dropping unemployment eligibility is not the same as those people getting jobs, it onyl means they exhausted benefits and now will be MORE of a drain. Thus the news leaked last week that 130,000 net loss in jobs created over the 1st 6 months of the year.

veritas's picture
verified

I see you didn't provide an alternate inflation figure.

Rather smoke and mirrors.

thinkingman's picture

Almost a full day after my

Almost a full day after my lesson and thats the best you could do...I'll make it easy for you...find ANYONE who bids on state work and ask how "competitive" the bids have gotten - folks are now doing the work at cost just to stay afloat, road work, landscaping, office rehab, etc for the state. Ask any hospital, physician or other health care provider about the decrease in reimbursement rates for services....Other than state employee wages, these are the two biggest expenditures for the state - and the reduction in what they pay out means deflationary , not inflationary rates. You may not like the answer but its solid and feel free to ask Baldy's own economic analysts to verify it if you still don't believe it.

veritas's picture
verified

Evidently your Boy Bush thought so......

Did you talk to him about it?? Economy goes to hell, and he funds two wars on a credit card from China.

You say he was an MBA? Oh, Brother!!!

mrnpchick's picture

inflation

Somehow, I don't believe we've had 21.34% of real inflation in 10 yrs. And even if the the total amount of increased spending is only "half" of what Mr. Fletcher says, that is a far cry from a claim that state spending has actually decreased.

veritas's picture
verified

Not in ten years - but eight.

Read what I wrote, and then use the Government's Consumer Price Index Inflation calculator at the site that they provide......

You don't have to believe facts. The Catholic Church ignored the fact that the Earth revolved around the Sun for many years and persecuted Galileo for teaching the same.

veritas's picture
verified

How much of a spending increase is this????

If, as Mr. Fletcher claims, State spending increased from $5.393 billion in 2002 to 7.726 billion in 2010 - that would be quite an increase in spending - 2.333 Billion Dollars!!

But what has happened to the value of the dollar of those eight years?

Let's take a look at the 'Inflation Calculator' provided by the Government's Bureau of Labor Statistics Consumer Price Index Web Site - http://inflationdata.com/Inflation/Inflation_Calculators/Inflation_Rate_...

Let's input the starting month of May, 2002 - and an ending date of May, 2010. The calculator tells us that there was an inflation rate of 21.34%from 2002 through 2010.

Therefore - the inflated value of that original $5.393 Billion is $6.544 Billion in 2010 dollars, or $1.182 Billion actual dollars over eight years. Not nearly as great as Representative Fletcher would have us believe - about half.

We all have to deal with taxes and inflation - they are a fact of life. But don't try to scare us with an eight year history of spending increases without factoring in inflation, Mr. Fletcher. It's dishonest - and a political trick.

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