Gov. Paul LePage made a strong case for lean state government in his budget address last week, and he laid out an approach that seems to avoid drastic measures.
He surprised us, for instance, with his promise of increased state aid for local education. The governor also said he would avoid cuts to higher education so Mainers can continue to rely on community colleges and universities to keep pace with the changing job market.
He seemed conciliatory toward state employees, who face a severe cutback in pension benefits and a statewide hiring freeze. He promised “no mass layoff, no furlough days, no across-the-board cuts and no gimmicks.”
But the governor’s conservative views were part of the message as well, particularly in his short-sighted criticism of state debt, and his recommendation that Maine consider no bond proposals in the next two years.
He has made a strong case that Maine’s pension liabilities are a serious problem, but the state’s good credit rating reflects its frugal approach to borrowing. State bonds for road and bridge improvements, and for sewer and water projects, are supplemented by substantial federal aid, and they are part of an ongoing schedule of public improvements. Taking a holiday from these obligations will not be good economic strategy.
In contrast to his opinion about debt, LePage takes an easy-going attitude toward taxation. He may be right that Maine’s inheritance tax needs a more generous exemption and that state and federal tax codes should be closely aligned. But a logical way to pay for these adjustments would be to increase the state’s top tax rate, not to promise lower taxes for all.
The governor’s anti-tax message is politically well calculated, but it remains to be seen whether spending cuts alone will be enough to balance the budget, and whether his proposed tax cuts can actually benefit Maine’s economy.
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Questions? Comments? Contact Managing Editor Nick Cowenhoven at nickc@journaltribune.com.
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