Get smart

Budget problems? It's the stupidity, stupid.
By AL DIAMON  |  March 10, 2010

There are lots of theories about what's wrong with Maine's economy. Some people think the anemic nature of the state's fiscal health should be blamed on our high taxes. Other folks fault the Legislature's profligate spending. Excessive business regulations get their share of criticism, as do lackadaisical efforts to encourage development.

Republican gubernatorial candidate Bill Beardsley is reported to have told an Aroostook County radio station that his son had to seek work elsewhere because Maine "wasn't Christian enough."

With all due respect to Beardsley, who appears to be suffering from a serious imbalance in his medications, I don't believe it's any of those things. So, what is it?

It's the stupidity, stupid.

Consider the case of the "12 Town Group," an alliance of selectmen from a dozen York County towns that recently sent letters to every member of the Legislature calling for a 1 percent increase in the sales tax for the next two years and a 5-cent hike in the gasoline tax for 18 months.

"No economic challenge in our past was ever resolved without bold vision, risk taking and sensible action," the letter says. "A bold approach is called for today as well."

Funny, but I can't recall any previous recession that was solved by anybody in Maine doing anything either "bold" or "sensible." I do remember budget gimmicks — like selling the state's wholesale liquor business — that cost more revenue in the long term than they provided in the short term. I can recollect instances in which taxes were increased "temporarily," only to remain high for many years longer than originally promised. There were phantom funds transfers from one fiscal year to another to make it look like the books were balanced. But mostly, I have memories of those downturns coming to an end because the national economy finally turned around for reasons nobody could adequately explain.

What's notable about the selectmen's letter is that it ignores an obvious question: If higher taxes are all that's required to end the recession, why don't these towns raise property taxes? I don't suppose the answer has anything to do with the selectmen's fears that if they proposed doing that, the voters (many of whom, as Bill Beardsley has warned us, aren't Christians) would string them up from the street lights their towns can no longer afford to operate.

It's always easier if somebody else takes the blame. Somebody in Augusta, for instance.

But legislators already have their own opportunity to exercise stupidity. In late February, the Maine Revenue Forecasting Committee (motto: We Picked The Kansas City Chiefs To Win Last Year's World Series — How Were We To Know They Aren't A Baseball Team?) issued its revised projections for the amount of money the state could expect to collect between now and June 30, 2011. That figure was up $51 million over the previous estimate. Although, it was still well below the five or six estimates the committee came up with before that.

In other words, they haven't gotten it right since Maine had more Christians than it knew what to do with.

So, why believe them now? According to news reports, Mike Allen of Maine Revenue Services, a committee forecaster, told the Legislature's Appropriations Committee that the future of the economy was tough to predict, what with so many variables and all.

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Related: I can't recall, The quiet man, Paying debts, More more >
  Topics: Talking Politics , U.S. Government, Sales Tax, Economic Crisis,  More more >
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