“Big Sister” Mills Releases
Proposed $8 Billion State Budget
MHPC Calls it “Unsustainable”
Dems Look to Raid State Savings Account to Fund Free Handouts and Goodies for their Voting Base
By: David Deschesne
Fort Fairfield Journal, February 27, 2019
The $8 billion state budget released by Maine's new Democrat Governor, Janet “Big Sister” Mills (named after George Orwell’s “Big Brother of 1984 fame) represents an 11 percent increase over the previous State's budget, or $800 million. The proposed budget has been called by critics a costly and substantial expansion of state government.
“This two-year budget proposal is a reckless and irresponsible step backwards for Maine,” Maine Heritage Policy Center (MHPC) Chief Executive Officer Matthew Gagnon said. “It will take us back to the days of uncontrolled spending and busted budgets, and will set the stage for future tax increases.”
According to research done by MHPC, the first budget signed by former-Gov. Paul LePage totaled $6.1 billion. Before leaving office, the last budget approved by LePage totaled $7.2 billion, an increase of about $1 billion in annual spending over an eight year period. Gov. Mills’ budget proposes $800 million in new spending in the first biennium, or nearly four-fifths of the new spending under LePage’s tenure.
“Big Sister” Mills is prepared to spend approximately $150 million over the next biennium on Medicaid expansion. This exceeds the initial estimate of $55 million annually that was developed when the Medicaid expansion initiative appeared on Maine's ballot in 2017. This estimate reflected a total of 70,000 Mainers receiving coverage under the program.
Instead of returning surplus revenues to taxpayers in the form of tax reductions, Gov. Mills’ proposal relies on nearly every penny of projected revenue over the next biennium, about $7.9 billion, with just $383,000 to spare after using a number of one-time funding sources and leftover surplus funds.
“Gov. Mills is pitching this to the Maine people as fiscal restraint, but nothing could be further from the truth,” Gagnon said. “It spends nearly every penny of the money she thinks the government will take in over the period. If revenues are even marginally below expectations, she will have no choice but to raid the rainy day fund or raise taxes.” [emphasis added]
At present, there is a sort of “good cop/bad cop” dichotomy going on in Augusta with “Big Sister” Mills playing the part of the “good cop” by declaring no tax increases will be imposed on Mainers, even for the massive Medicaid increase she recently enacted. Meanwhile, the Democrats in the legislature are playing the “bad cop” by stating there is no way to fund all of the free handouts they want to give away to their voting base without raising taxes. In addition to bills that would fund paid medical leave with a 0.5 percent tax increase, Democrats in the Maine legislature are also planning to deliver on their promises of universal Pre-K in public schools, more spending on the opioid crisis and moving ahead with still more Medicaid expansion. In all, the government of Maine is potentially facing an additional $700 million in new expenses.
Ryan Tipping (D-Orono) and other Democrats have indicated a desire to raid the State's rainy day fund savings account of $273 million to help pay for some of their free handouts. But, additional revenue would still be needed to fund everything on their 2019 freebies list after that limited savings account is used up and the State put back in the status of being flat broke - a feat Democrats are uniquely qualified to achieve in record time.
“Big Sister” Mills is staking a bet that Maine's economy will continue at its present pace into the future and all of the proposed revenues that might come in if that momentum continues have already been spent in her budget. This would be as irresponsible as a person spending all of his/her savings, then committing all of the income he or she might make at their job over the upcoming two years toward things they want to buy and pay for now, without considering the possibility of an economic downturn, catastrophic illness, or their place of business going out of business causing a disruption in their paycheck and subsequently the revenue they think they are expected to receive over that time period.
