State Spending Has Outgrown Ability to Pay

January 6, 2009

State Spending Has Outgrown Ability to Pay

All Mainers realize that both the national economy and state economy are in the midst of a dramatic downturn and the impact is being felt by us all. Families are cutting back and restructuring their budgets in an attempt to stay above water and avoid possible foreclosures, tax liens or unacceptably damaging debt. Many are eliminating luxury purchases and recreational activities that were once a normal part of life. Things are tough and we might not have seen the worst yet.

Maine State Government is in the same situation. Currently, it takes roughly $6.33 billion to run state government for two years. Incoming revenues have dropped drastically. State agencies and departments have reported to Governor John Baldacci that they will need an additional $508 million to sustain the current level of services through the next budget cycle.

When you add to that the significant decline in revenues amounting to $330 million less than projected, this begins to represent an overall shortfall of about $838 million. Our state faced a similar shortfall just over six years ago. However, the big difference now is that the dismal economy will make it very difficult to recover from this crisis. Many experts are saying economic recovery will be a long-term event.

The bottom line is clear. State government cannot sustain its current level of services. For the governor and the Legislature, there are few options available to deal with this challenge. We can raise taxes (as the federal government just announced they are considering on gas and diesel fuel to fund highways and bridges). Or, we can reduce state spending through the elimination of positions (jobs), some serious reductions to many state funded programs, major adjustments to public education funding, and the elimination and restructuring of many state assistance programs.

Again, it appears our state's political leadership is going to take the easy way by simply reducing spending through the application of across the board cuts to all agencies, departments and programs. That is exactly how it was done during the 123rd Legislative Session and it didn't work. We still ended up with a significant shortfall for the remainder of the current budget cycle ending this June 30th.

The time has come for Maine State Government to take on the difficult job of evaluating every state agency and every state-funded program. They must be measured for their effectiveness so we will know which agencies and programs are meeting their goals. Those that score high in this evaluation should experience a lower impact in potential cuts. Agencies and programs falling well short of their goals (and there are many) should experience greater cuts. In some cases, they should be eliminated entirely. Across the board cuts are nothing more than an exercise in crisis management and offer little long-term benefit.

The e-mails are pouring in to my computer from all over the state. I receive dozens from health care providers, public education administrators and teachers, foster care parents, hospital administrators, corrections administrators (jails), municipal administrators, concerned seniors, college students concerned about reductions to student loans, and many more. I read them all and try to respond to almost everyone.

What it all comes down to is simply that no one wants any cuts that will affect them personally. I must tell you, in reading all this correspondence, I can truly sympathize with almost everyone's concerns. And believe me, some of them are truly heartbreaking. That is why I feel those of us charged with overseeing this state must stop the business as usual approach and the application of across the board cuts. Many people get hurt as a result of this approach, and it blatantly fails to correct the problem so state government can sustain a reasonable level of services for the future.

A serious, thorough-going evaluation of state government by an independent auditing firm is long overdue and would represent a crucial first step toward establishing a reasonable state budget for the future. A year ago, in his annual address to the Legislature, Gov. Baldacci put it bluntly. "Maine State Government can no longer be all things to all people," he said. We can only spend what we can afford without creating an unfair tax burden on our citizens.

As the 124th Legislature gets under way, we can take on the challenge of trying to correct our state's financial problems and not just slap another patch on a bad tire.

Rep. Ralph W. Sarty, Jr (R-Denmark) is serving his second term in the Maine Legislature.

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