Legislature takes two steps back, one step forward on spending
The Maine Legislature’s last true meeting of the legislative session ended on Thursday morning, and finally, lawmakers passed the supplemental budget. Gov. Janet Mills now has until April 29th to veto, in whole or in part, the spending plan, however she has indicated that she will likely sign the budget as is.
This is concerning for a few reasons. While the Appropriations Committee walked back several of the most controversial sections of the budget it attempted to add at the eleventh hour, many worrying items remain. Gov. Mills should line-item veto some of these spending lines so the money that the Appropriations Committee is taking from highways is returned to supporting transportation, as well as funds raided from the Budget Stabilization Fund (rainy day fund) returned to the state’s savings account.
A primary example of two steps back, one step forward on spending is how the Democrats on the Appropriations Committee treated highway funding during last-minute budget negotiations. During their controversial 3 a.m. budgetary heist, they attempted to seize more than $60 million in ongoing funding from the Highway Fund to insert into the General Fund for various pet projects. While Democratic leadership finally talked some sense into members of the Appropriations Committee, the budget still takes $11 million that should have gone to fix roads and bridges.
By starting big and being reined in by the governor, the Appropriations Committee Democrats are giving the impression that they reached a fair compromise among their counterparts. But this “compromise ”is entirely illusionary, as simultaneous to their walk-back of raiding of the highway budget, they removed the emergency preamble from the budget bill. An emergency preamble is a part of a bill that indicates the measure is immediately necessary and, thus, support from both parties is needed for it to pass and become law upon the governor’s signature. So, while Democrats on the Appropriations Committee pretended to find a compromise, they admitted through their actions that they had no intention to compromise with members of the other party.
Luckily, Gov. Mills has a tool to offset this inappropriate seizure of funds. If she line-item vetoes some of the excessive supplemental budget items, she would be adding to the overall revenue surplus of the state of Maine. The benefit is that any budgetary surplus Maine has goes to a funding cascade defined by Maine law. After shuffling through a few smaller accounts, 80% of excess state revenue goes to the Budget Stabilization Fund and 20% to the Highway and Bridge Capital Program.
Our Budget Stabilization Fund was at its maximum, but a section of the budget bill draws $60 million out of it to provide relief to businesses and communities for recent harsh winter storms. So, by cutting down even just a little on some of the more impractical items in the supplemental budget, Gov. Mills could not only return funding to our state’s roads but preserve some funds for the future, as her earlier proclaimed “fiscal restraint” should lead her to do.
This would also allow for more bipartisan, thoughtful, and measured political discussions on how next year’s Legislature should spend this money. Many items shoved into the budget by the Appropriations Committee are inefficient uses of state surplus. With so much excess revenue, Maine could even pass a tax cut in the future.
The list of budget items that could be reduced or removed is quite long. The budget earmarks about $76 million for rent relief, a large portion of that being eviction rent support. Mills could reduce this number by a large amount, as one-time rent relief is simply not an effective way to reduce the cost of living or help low-income Mainers.
Another is the $21 million is proposed to be spent on K-12 education. A recent Maine Policy Institute report has shown that our education system has been falling behind other states, but throwing money at the problem will not magically make Maine’s education system better. We’ve been doing just that for years, with no improvement in sight.
In the $430 million Maine supplemental budget, over $300 million of that spending is in one-time expenditures. This massive amount of one-time spending drew the ire of Republicans in the Legislature and ultimately led to them opposing the budget bill. This temporary spending strikes strongly against Gov. Mills’ previous slogan of “fiscal restraint,” and Mills can and should reduce the more egregious of these items with her veto pen.
If she does this, she could treat the Budget Stabilization Fund as her earlier desired reserve fund and return the money wasted by lawmakers on pet projects to the rainy day fund. One would hope she does this, as she recently stated some of the spending added to the supplemental budget by lawmakers at the last minute was “ill-advised.”