The Maine Heritage Policy Center, a right-wing Portland think tank, has been bragging in news releases about how state leaders — the Democrat-controlled Legislature and Democratic governor John Baldacci — have followed its advice, approving a two-year state-government budget that, among other cuts, slashes school aid, programs for the needy, and state-employee pay. With little discussion, the $5.8-billion budget passed overwhelmingly on May 27.
Democrats said they had no alternative to budget cuts — after years of cuts — to close a huge, recession-induced shortfall between expected revenues and expenditures. They refused to consider tax increases — even on the wealthy, as some states have — or repeal tax breaks benefiting corporations and rich people, which amount to $3 billion over two years.
They never seriously considered the revenue side of the equation. “The reality of the situation is that it couldn’t pass in this Legislature,” says Representative Emily Cain (D-Orono), the Appropriations Committee cochairman, about a tax hike on the rich.
Even the Maine State Employees Association, a union, never presented an alternative to cuts that will hit its members hard, largely through 20 payless government-shutdown days and a freeze on merit raises.
“Where they get the revenue is not our call,” says Tim Belcher, MSEA director.
But alternatives were available. Take just three controversial cuts. According to the governor’s office, over the two years reductions will total $37 million in school aid, $25.6 million in children’s services, and $33.8 million to state employees. Total: $96.4 million. The state tax bureau has calculated that if the income tax were raised from 8.5 to 12 percent on just income in excess of $200,000 (for married couples), $102 million in additional cash would be raised in 2009 alone. (See “Hey Guv: Stop Slashing!” by Lance Tapley, December 31, 2008.) If the BETR (Business Equipment Tax Reimbursement) program were eliminated, $125.7 million would be raised over two years.
Under the BETR give-away, the state compensates many corporations for property taxes they don’t even pay, thanks to local tax breaks — it’s known as the “double dip.” (See “Corporate Welfare State,” by Lance Tapley, February 20, 2008.) The new budget does reduce the BETR payments by 10 percent.
The Maine Heritage Policy Center “has taken over the psyche” at the State House, says Senator Peter Mills, a Republican moderate from Somerset County.
