The Budget And The Bungler

State budgets are complex and fluid. That being said, let’s look at some facts. State expenditures include spending on government salaries, infrastructure, education, public pensions, public assistance, corrections, Medicaid and transportation. Revenues come mainly from tax collections, licensing fees, federal aid and return on investments. In fiscal year 2014, 49.7% of total tax revenue came from sales taxes and gross receipts, with income taxes accounting for 41.5% of total tax collections. Maine had the 3rd largest tax collections per capita in comparison to its neighboring states. Federal aid to Maine in 2013 was approximately $2.8 billion or 35% of the state’s general revenue. State spending in FY 2015 was 7.6%, the 3rd largest among New England states. In FY 2015, Education accounted for 20.5% of expenditures while 34.4% went to Medicaid. Between 2010 and 2014, the share of the state budget spent on Medicaid increased from 28.6% to 34.4%.

Gov LePage’s 2016-2017 biennium budget for FY 2016-2017 included $300 million in tax reductions which would primarily lower top individual and corporate income tax rates and adjusted sales taxes. He also proposed increasing taxes on large nonprofits such as hospitals, colleges & private schools. Fortunately his veto was overridden by the legislature. The Governor’s entrenched ideology not to accept Medicaid Expansion has severely undermined the state’s ability to effectively balance the state budget without undermining its citizens.

Medicaid Expansion would provide needed coverage for 64,000 uninsured Mainers, provide jobs across all work sectors and increase the states revenue base. The federal government pays 63% of the current Medicaid program. It would have paid all of the Medicaid costs during 2014-2016 with the federal share decreasing to 95% in 2017, 90% in 2020, and remaining at that level thereafter. Finally, those corporations who come to the state, receive perks and incentives from the state and then abruptly re-locate, leaving workers and taxpayers high and dry, must be required to pay a severe cost for these grotesque levels of greed. The wealthy and powerful should not have a stranglehold on tax cuts/breaks. Businesses owe their lives to the everyday workers and taxpayers.

In the end, Medicaid Expansion is not just about assisting those who are in the most need of health care. It is also about increasing economic activity, supporting a significant number of new jobs, reducing state spending on State-Funded Health Care for the uninsured, reducing uncompensated and charity care for small and rural hospitals, reducing the costs that are passed on to consumers and businesses and increasing state revenue by increasing job opportunities. More jobs obviously means that more people are employed, leading to higher family incomes. Had expansion been implemented in 2014 and 2016, there would have been an additional $288 million in federal Medicaid funds provided to the state. If we want to increase state revenue and effectively balance the budget in the future, we must reverse the course on which we are now traveling.

And another thing. Only 20.5% spending on Education? Don’t get me started!

 

Richard A. Evans, MD, Candidate, Maine House of Representatives (120th District)

 

 

Looking To Maine’s Future; The Needs Of The People

This past week, I had the privilege and honor to attend the biennial Maine AFL-CIO Committee on Political Action (COPE) Convention in Auburn.  As noted by Cynthia Phinney, President of the Executive Board, the upcoming election in November will again be one where the attack on workers and unions will be unrelenting. The Maine AFL-CIO is comprised of approximately 160 local unions and labor bodies, representing some 40,000 Maine workers. Governor LePage has made his disdain for organized labor and workers in many sectors pretty clear. The Governor would prefer nothing more than to make Maine a “Right to Work” state. For those who may not have been watching over the last couple of years, this ideology has essentially decimated worker’s rights and collective bargaining in Wisconsin, where Governor Scott Walker chose to go down this same path. Not unexpected, things are not working well for workers in Wisconsin.

But let me digress for a moment. In April, 2016, a study by the Maine Development Foundation and Maine Economic Growth Council released a study called “Measures of Growth 2016. I don’t want to give the impression that there were no positive aspects for Maine in this report. In fact, Maine showed overall strength in three areas in particular: strength of air quality, water quality and the cost of doing business in the state.

Having acknowledged those facts, there are more serious ‘red flag’s’ that could affect the states capacity for full growth and should spur state government officials to enact policy solutions to address the states ongoing economic problems. The U. S. economy grew by 9.4% from 2009 to 2014. During that same time period, the New England economy grew by 5.8%, while Maine’s economy shrank by 1.2%. This is an issue that requires focused leadership and cooperation in our State government, and will require a long term commitment by state officials.

The ‘red flag warnings’ of immediate concern include in particular, our Transportation Infrastructure, Research and Development (R&D) and without any further delay, Education. It is time that we look at the big picture and take meaningful actions to resolve these consequential areas of weakness. Effective, efficient and safe roadways are essential to all businesses. When it comes to R&D, it is somewhat embarrassing that Maine’s total spending in this area was only 1% of the gross state product in 2011, the last year such data was available, far lower than 4.4% for New England and 2.9% as compared to the national average. What therefore is the result of this lack of investment? Lost jobs. State investment in R&D yields a high return on investment and promotes innovation which has been shown to generate approximately 80% of all economic growth.

Education, especially for our youth, is probably the states greatest potential for jobs, growth and development and economic stability. When it comes to post -secondary education, Maine is pretty much on par with the national averages but still lags behind New England in general. It is significant that the report cited that in 2014, 39.1% of Maine residents 25 and older held a post-secondary degree with a national average of 38.3% and the New England average being 45.8%. Maine lags significantly in our young people attaining bachelor’s, graduate and professional degrees. Two additional ‘red flag warnings’ for Maine are 4th grade reading scores and 8th grade math scores. Although relatively stable in comparison with New England and the national averages, both 4th grade reading scores and 8th grade math scores declined in 2013.

Given these factors, there is an obvious need for Maine to invest in developing an educated, skilled and entrepreneurial workforce that can meet the needs of businesses and create opportunities for our youth and others. Human capital is a critical factor in economic growth and is central to addressing issues such as poverty, food insecurity, health and wellness. This is an essential priority that must begin in early childhood and continue throughout adulthood.

All of these ‘red flag warnings’ are telling our elected officials that they are spending too much time talking about lessor problems while ignoring the more important issues of everyday Mainers.

This brings me back to the Maine AFL-CIO Convention. Many businesses try to avoid unions as they are convinced that their presence too often results in unwelcome sacrifices in profitability and control. This is an ongoing myth that has been perpetuated for the last 3 decades. My Dad, a trucker, who only went to the 8th grade, was a proud Teamster. He understood the value of unions and the part they played in him keeping his job and our family together.  Unions provide often unappreciated benefits to both individual companies and larger economies. At a time when state Governors are delighted to shower tax breaks, training funds and other goodies on anyone bringing a new factory to a state, then leaving the state once it has consumed as many freebies as possible,  the unions voting power can be a useful agent to make sure your existing company or business gets its fair share. These unions have an interest in the issues that can improve operations, safety programs, ergonomics, worker education and holding companies feet to the fire. By giving workers a collective voice, they can improve a plant’s economy, productivity, help to reduce staff turnover and promote stability in the work force. Over the last 3 decades, companies and especially large corporations have transcended the path of economic inequality and have crossed the road to outright greed. This trend has to be reversed.

Come November 8, 2016, there will be two significant ballot initiatives:

  1. The minimum wage Increase Initiative that increases the minimum wage to $12 per hour by 2020.This bill raises the minimum wage of $7.50 to $9.00 in 2017, and in $1.00 increments, up to $12.00 in 2020. It includes service workers who receive tips from the current rate of $3.75 to $5.00 in 2017 and then by $1.00 per hour each year until it matches the minimum wage for all other workers.
  2. The second initiative is The Public Surcharge Initiative (Stand Up for Students). This initiative establishes a 3% surcharge on household income over $200,000. This initiated bill establishes the Fund to Advance Public Kindergarten to Grade 12 Education for the purpose of improving the ability of the State to reach the annual target of 55%, as specified in statute, for the state share of the total cost of funding public education from kindergarten to grade 12, and for increasing direct support for student learning rather than administrative costs. The annual $157 million the surcharge is estimated to raise would be added to a fund known as the Fund to Advance Public Kindergarten to Grade 12 Education. By any standard, this would be a very good start towards adequately preparing our kids for the future.

The 1st initiative is supported by the Maine AFL-CIO, Maine People’s Alliance, Maine Small Business Coalition, Maine Speaker of the House Mark Eves and the Ballot Initiative Strategy Center. The 2nd initiative has broad support from the Maine AFL-CIO, The Maine Education Association, The Maine Parent Teacher Association, The Maine State Employees Association, The Maine Small Business Coalition, The Maine Peoples Resource Center and The Maine Peoples Alliance.

It goes without saying that both initiatives are opposed by Governor LePage, et al, and I’ll leave it at that.

The bottom line is that we as a state, have many opportunities in front of us. Maine must be more proactive in pursuing those strategies that are necessary to provide jobs, a decent wage, a stable economy and educational opportunities for our young people by providing them with the tools that they will need going forward. Taking these steps will go a long way towards vigorously addressing the too often neglected issues of hunger, poverty and homelessness in this state. We should be doing everything we can to harness the economic potential of our small towns and municipalities.

Most people are not looking for a handout, they’re looking for a helping hand. Rather than threatening to eliminate the SNAP program, which by the way is illegal under state stature, Gov LePage should seize these opportunities to finally do something right for the citizens of Maine.

Finally, I want to congratulate Maine House Majority Leader Jeff McCabe on receiving the Maine AFL-CIO Edie Beaulieu Legislative Award named for the first woman to Chair the Legislature’s Labor Committee. Congratulations also to Rep Erin Herbig, Chair of the House Labor Committee. Both have been tireless supporters for Maine workers and worker security. I also congratulate American Roots for their receipt of the Maine AFL-CIO Solidarity Award. This is a small business that exemplifies success when business and workers, together, work for the good of each other. Congratulations as well to Jim Snow for receiving the Maine AFL-CIO Working Class Hero Award who is retiring after serving as The Northeast Regional Director of the AFL-CIO for the past 6 years.

My personal thanks to the Maine AFL-CIO for inviting me to attend such an outstanding, dedicated and rewarding event.

Richard A. Evans, MD, Candidate, Maine House District 120