AUGUSTA – Although lawmakers were still trying to digest the details of Gov. John Baldacci’s budget plan Friday afternoon, Republicans were already clearly concerned with at least one of his ideas: Selling 10 years worth of Maine State Lottery revenue.
“The privatization of the lottery revenue is a big concern,” said Rep. Sawin Millett, R-Waterford. “Until we can see the entire details, I’m really cautious about mortgaging a huge revenue stream that we have, just like we did with liquor.”
Baldacci has proposed selling 10 years of lottery revenue to the Maine State Retirement System for $250 million upfront. The state makes about $40 million a year from the lottery.
It’s using one-time money, said Millett, who serves on the powerful Appropriations Committee.
“We’re (getting) $250 million of one-time money and forfeiting $150 million in the future, so the gain is one time, the pain is ongoing,” said Millett, who under Gov. John McKernan served as commissioner of finance.
Republican leaders echoed his concerns.
Baldacci spokesman Lee Umphrey acknowledged that selling the lottery revenue is a “gimmick,” noting that as the former finance commissioner under Gov. John McKernan, “Millett would be able to identify a gimmick.”
McKernan used a number of so-called gimmicks to balance his budget during the early 1990s.
Selling lottery revenue is necessary, Umphrey said, because “it’s a way to avoid raising taxes and (a way of) making investments in education and people.”
Sen. Peggy Rotundo, D-Lewiston, Senate chairwoman of the Appropriations Committee, said Baldacci’s budget “looks responsible.”
“It should please Maine residents,” Rotundo said. “The governor’s been able to control spending. This is the lowest spending rate increase in 30 years. It looks as though they’ve worked hard to protect services to the most vulnerable through restructuring. There are no broad-based new taxes. There’s investment in the future through research and development. The highway fund is in good shape.”
And there’s more money for public education and property tax relief, Rotundo said.
Fellow committee member Rep. Margaret Craven, D-Lewiston, called selling lottery income “a very creative initiative. It’s probably not something I would oppose, even though it’s borrowing from our future.”
Even though the lottery revenue would be one-time money, Craven said she hopes Maine’s economy improves so there won’t be a future deficit.
Other states have made similar sales of their future lottery earnings for quick one-time gains.
Area legislators had mixed reaction to other parts of the budget.
Rep. Lillian O’Brien, D-Lewiston, loved Baldacci’s idea of quadrupling fines for people not wearing seat belts as a way of encouraging their use.
“He’s making a statement that everybody who drives needs to realize it benefits themselves to buckle up,” O’Brien said. “I firmly believe in it.”
Craven, Millett and Rotundo all said they need to know more about the $530 million Baldacci plans to save by “streamlining” state government.
That’s a lot, about two-thirds of the deficit, Millett pointed out. “I’ve heard bits and pieces” about those savings.
One example is that health care benefits would be reduced by $10 million over two years to 22,000 people in the MaineCare program who are the working poor without children.
There would be other reductions to providers of community mental health services and children’s behavioral programs.
Millett said he understands “the magnitude of the problem the governor’s dealing with,” and is committed to working with him “to try to make the budget balanced, and preserve programs as best we can.”
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