Last week, the Maine Heritage Policy Center released its report, Priority Maine. The purpose of the report is to introduce Maine people and policymakers to the fundamental facts regarding spending in Maine, and more importantly to offer a list of potential areas that our elected officials could consider when discussing how to make Maine a more affordable place to live and work.

Our list of spending reductions, program eliminations and suggested policy changes is by no means a complete list, nor is it without significant consequences for those receiving services from those programs. However, it is an honest approach to a budgeting process that is littered with gimmickry, unsustainable promises and $100 million in new taxes, hidden fees and revenue changes that fall squarely on the backs of Maine people.

Here are a few highlights of the Priority Maine report:

1. Maine state government continues to spend tax dollars at a rate far above inflation and completely out of step with our population growth.

From 1995 to 2004, when you add together all of the federal funds, highway funds, state funds and those funds designated as “special revenue funds,” you will discover that total spending in Maine grew by 69 percent. Inflation in that same period was just under 25 percent and our population growth came in around 5 percent.

2. The latest budget proposal increases the tax burden on Maine people.

Maine’s two-year budget from the previous session raised taxes and fees by almost $200 million, and the current budget appears to be headed in the same direction. While the budget is still being debated, the current proposal includes more than $100 million in taxes, fines and fees. More than $300 million in new taxes during Gov. Baldacci’s first three years in office is not consistent with his “no new taxes” campaign pledge.

3. The budget proposal fails to address the root causes of Maine’s spending growth, most importantly Medicaid spending.

Medicaid spending continues to drive the spending increases in state government, yet this budget has only one answer: more. Medicaid is devouring the budget and, unbelievably, there are plans to expand Medicaid to even more beyond the 261,000 already covered. Major reforms and cost controls must be pursued now to support its long-term success. Our report highlights a number of spending cuts and program changes that would move Maine closer to the national average in terms of eligibility and services. In addition, we have included a number of strategies for Maine policymakers, including:

• Assess the real long-term demographic, enrollment and spending trends of Maine Medicaid.

• Create a 15-year solution and stop the “Just-Get-Me-Through-the-Next-Budget” strategies of the past.

• Provide traditional Medicaid services to those priority populations below the poverty limit.

• Apply for a federal waiver to provide vouchers and premium assistance to those above the poverty level.

• Allow Mainers to purchase a private health insurance plan licensed in any New England state, thereby giving Mainers lower cost insurance options and reducing dependency on Medicaid.

4. School funding: More money without increased efficiency is a prescription for financial disaster.

In 1995-96, per-pupil spending in the state of Maine was $4,738. That number has climbed 48 percent to $7,018 in just eight years. Meanwhile, school enrollments continue to drop. The Maine Heritage Policy Center recognizes the importance of maintaining local schools. However, we do not believe that Maine people share the same passion for maintaining local administrative functions. Our report asks a very basic question: Is it possible to combine administrative functions and back-end operations in an effort to manage costs, direct more resources to the classroom and teachers, and divert funds away from the administrative costs? It is a fair debate to have, and will enable rural Maine to keep its local schools and reduce costs.

I would encourage everyone to read the full report. It is a basis for debate, not the Holy Grail. The spending reductions will be difficult and will truly affect Maine people, but the cost of doing nothing and pretending things are fine will be even more severe. It has been said that Maine is headed down a slippery slope – I am afraid that the slope has long since disappeared, and we are now looking out over a cliff.

I would implore Maine lawmakers not to jump, but to turn around and take an honest look at spending in Maine. We have started the conversation with Priority Maine, and we know that Maine people welcome the honest debate.

Roy Lenardson is senior policy analyst at The Maine Heritage Policy Center. He can be reached at [email protected].