Republican radio address: Cutting State Spending

For the weekend of October 9-10, 2010

Greetings, this is Jane Knapp, state representative from Gorham. It’s my honor to deliver the Republican message this week.

With the election just a few weeks away, there’s a great deal of excitement in the air. We will be electing a new governor and a new Legislature. All 186 seats in the Maine Senate and House are on the line. But once all the campaigning is over and the balloons and banners come down, a somber reality will set in. The men and women who will be sworn in as members of the 125th Legislature face a very tough challenge.

The most important work of any new Legislature is writing a state budget for the next two years. This one will require significant spending reductions, perhaps as much as $1 billion. With 50,000 Mainers unemployed, state tax revenues remain far below the levels of a few years ago. Federal stimulus money filled in some of the gap, but it just delayed the inevitable reckoning that is now upon us.

Few legislators are economists or budget experts. Fortunately, we have a fresh blueprint for reducing spending by hundreds of millions of dollars. An independent outside group called Envision Maine combed through the state budget to identify programs where we spend far above the national average. Working with another non-profit group named Growsmart Maine, they’ve issued a report entitled “Reinventing Maine Government.” All told, they found about $1 billion in potential savings.

The authors examined the full range of state spending and concluded that Maine has more government than it can afford – a lot more. As the report says, “In category after category, Maine spends more on government than either similar rural states or the national average.” That extra spending adds up. Mainers spend about $15 out of every $100 they earn on state and local government. The national average is $13.21. Our costs run 25 percent higher than the New England average. The authors also highlight what they called the three “great ticking time bombs.” Those are an aging population, the billions of dollars owed to the public pension plan, and the rising cost of health care.

The solution to our stagnation is economic growth. As the report says, “It turns out that whatever you care about – whether it’s jobs or people or the environment or social programs – the economy matters. A stronger economy is the only answer to our many problems.”

The report features eye-popping statistics. For example, Maine pays 69 percent more for welfare and Medicaid than the national average. Just bringing our programs to the national norm would save $361 million per year. Maine’s Medicaid program – MaineCare – has moved well beyond the point of affordability. The state had about 200,000 Medicaid recipients in 2002. We now have 297,000, all receiving free medical and dental care and many optional services not offered in other states. As a result of this staggering expansion, the state cannot pay its bills. It owes Maine hospitals more than $350 million for Medicaid bills dating back to 2007. The debt grows by $2 million every week.

The report also recommends that Maine move its student-teacher ratios closer to those in other states. Maine has 11.3 students for every teacher, while the national average is 15.8. no wonder we spend about $1.9 billion a year on K-12 education.

The report does not blame any political party for the problems. But it offers some advice to a new governor and new legislators wrestling with deep spending cuts. As they write: “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. Standing still is not an option.”

This is Jane Knapp. Thank you for listening.

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