1) The GOP opposed the original plan because ... well, because that's what Republicans in this state do, they oppose things. But the minority party also complained that once the economy recovers, the expanded sales tax would rake in lots of extra money, which will fund lots of new spending. The GOP is correct (I know, amazing, isn't it). To make sure the reformed tax structure doesn't result in an unsustainable spending spree, the state needs tough limits on expenditures. I suggest that a cap kick in when the state budget again reaches its pre-recession level, about $6.3 billion for two years. That will allow Democrats to restore some of the more onerous budget cuts, but it will prevent them from going beyond that point with expensive new programs. After that, state spending would grow only at the rate of inflation plus population growth.
2) Baldacci will be gone after next year. A new governor might have sufficient intestinal fortitude to back further expanding the sales tax (my preference would be to put it on everything except grocery staples and health care) and further reducing the income tax, say to something south of 4 percent. Avoid the whining about how this would hurt the poor by giving them a full sales-tax rebate. Finally, some stability and common sense.
3) Dedicate any excess revenue to refilling the state's Rainy Day Fund (this time, put in enough to actually handle a major fiscal crisis), repairing the state's infrastructure (in lieu of gasoline tax hikes), and tax rebates.
4) If there's money left over, buy beer. As noted above, that won't solve the problem, but who cares.
Don't just sit there drinking. E-mail me at aldiamon@herniahill.net.
