Government restructuring becoming urgent
By Rep. Tyler Clark
Maine’s next Legislature will face an important test: Does it have the courage to revamp the way the state does business to weather the recession and set course for a more prosperous future? If the reactionary forces of the status quo prevail, the state will continue its economic stagnation. But if reform-minded legislators carry the day, Maine will take a major step toward prosperity and a government we can afford.
A sweeping new report on state government says Maine programs from prisons to MaineCare spend far above the national average. If the state scaled down these programs to that average, we could save more than $1 billion a year – a 30 percent reduction in state spending. The state could use that money to fund income tax cuts or to shore up programs that are underfunded, such as higher education. We could put our priorities back in the right order.
The report, by a Freeport-based nonprofit called Envision Maine, argues that we no longer have a choice. Here’s a sample of its 80 pages of analysis: “Many people will resist confronting these unpleasant realities. Others, who are deeply invested in the current structures of government, will instinctively resist change, out of habit or fear…..But the facts will not change. There simply isn’t enough money to maintain the status quo and the way we’ve been doing things. Standing still is not an option.”
The State of Maine has more government than taxpayers can afford. With 50,000 Mainers unemployed and consumers buying only necessities, revenues flowing to Augusta are running about $1 billion less than a few years ago. Federal “stimulus” money covered part of the shortfall in the current budget, which ends on June 30, 2011. For the next biennial budget for fiscal years 2012-2013, cuts of about $800 million are now predicted. The new Legislature that will be sworn into office this December will struggle with that huge reduction until the final votes on the new budget, probably next spring.
Into this mess has moved Envision Maine with its stunning report – “Reinventing Maine Government.” Co-produced by GrowSmart Maine, a Portland-based nonprofit, the authors open with this zinger: “The numbers are troubling, and the trends even more so. In category after category, Maine spends more on government than either similar rural states or the national average. In fact, we may spend as much as a billion dollars more.”
Mainers spend $15 of every $100 they earn on state and local government. That is 16 percent higher than the cost of government in rural states and 13 percent more than the national average.
The study discovered, for example, that Maine spends 69 percent more for welfare and Medicaid than the national average. By bringing those costs down to the national norm, the state would save $361 million – every year.
Even though the state spends huge sums of money on Medicaid, we owe hospitals more than $350 million for Medicaid services rendered as far back as 2007. That debt grows by $2 million every week. The crux of the problem is that MaineCare had 202,000 recipients in 2002, right before Governor Baldacci took office. The caseload now stands at 297,000 people, all receiving free medical and dental care, with no co-pays or premiums, not even a $5 fee to see a specialist. MaineCare also provides 24 optional services not required by the federal Medicaid law, such as private duty nurses and occupational therapy.
Nobody wants to see people go without health care, but we need to strike a balance between what is fair and what is affordable. We are now racking up hospital debt that cannot be paid. We simply don’t have the money.
The state could save another $100 million by bringing correction costs in line with the national average. Based on the report, Maine spends $93,500 per inmate, per year, while the national average is $46,000.
Compared to the rest of the nation, Maine’s spending on primary and secondary education also is extremely high, some $1.9 billion in 2007. The report says: “Public education is by far the largest local government service. Nationally, 58.1 percent of total local government payroll is in public schools. In Maine, primary and secondary education payroll is 71.4 percent of the total. In this ratio, Maine is fourth highest in the nation.”
In addition to these problems, taxpayers also are on the hook for a $4.4 billion shortfall in the public employees’ pension fund and another $2.2 billion shortfall in the health care program for retired state workers and teachers.
Over 36 years of one-party rule in the Maine House, these problems have grown and calcified. If Maine has any hope of thriving economically in the future, the new Legislature will have to “reinvent” state government. But it will be a fight every step of the way.
