What's wrong with Augusta?

By AL DIAMON  |  January 29, 2009

Not only did the state close the books with an $85 million surplus, it had extra dough left over from the previous year. In all, there was more than a quarter-billion in uncommitted cash laying around.

What's even more remarkable is this windfall occurred in the wake of a tax cut. The previous year, revenues had grown by more than 10 percent. Under the provisions of a law passed in the early '90s, any increase over eight percent automatically triggered a one-half-percent decrease in the sales tax, from six to 5.5 percent. (That provision had been approved at a time when eight-percent growth in state revenues seemed inconceivable in an attempt to fool voters into believing the sales tax hike was temporary.)

When all the figures for '99 were totaled up, revenues had increased by nine percent, which meant the sales tax was in line for another automatic reduction, this time to five percent. Democratic Senate President Mark Lawrence (yeah, the same guy who ran for Congress last year, is now York County district attorney, and wants to be appointed US attorney) tried to convince legislators to block the cut, but hardly anybody else was interested in committing political suicide. So, Lawrence got the Legislature to delay the tax break from October 1, 1999, to July 1, 2000.

Independent Governor Angus King (yeah, the same guy who today is hawking floating off-shore wind turbines that he says will turn Maine into "the Saudi Arabia of wind") was pretending to be a fiscal conservative that year. King had already vetoed 22 bills, preventing about $4 million in new spending. But he didn't seem to have enough juice left to block the tax-cut delay.

Democratic Speaker of the House Steven Rowe (yeah, the same guy who went on to become state attorney general and is now running for governor) was another key player in pushing back the tax cut, because he was royally pissed off by King's tightfistedness. "The argument that these small, inexpensive programs could push the state to the edge of fiscal disaster is ridiculous," Rowe told the Associated Press in a June 20 article his opponents in the 2010 gubernatorial race might want to file away for future reference.

In spite of all the maneuvering at the State House, the public didn't seem to give a damn. Perhaps that was because the economy was booming, with personal income in the state up 4.6 percent over the previous year (higher than the national average of 4.4 percent). Maine ranked first in New England and seventh in the country in payroll employment growth. More than 14,000 new jobs had been created. People were living in fat city. Who cared what the pols were up to.

If the voters had paid closer attention, they might have realized state government wasn't behaving quite as irresponsibly as is its norm. The pols used some of that extra cash to make a substantial payment on the unfunded liability in the state retirement system and added $39 million to the Rainy Day Fund, boosting its coffers to $132 million, the highest it had ever been. "It's now getting to a level where it's a realistic cushion," King told the Portland Press Herald.

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Related: Cutler for Governor, As gas prices go up, a public transit bill gains speed, Maine Democrats try to put the past behind them, More more >
  Topics: News Features , Augusta, Job Growth, Steven Rowe,  More more >
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