Wednesday, January 16, 2008

A Little More on "Average"

Yesterday I gave some thought on the need to cut the state’s budget. I said then that the new buzz word in Augusta is “average.” According to a couple of newspapers I read yesterday and today, the Morning Sentinel and the Times-Record, one speaker said the only way the state could become average was to cut its among the highest in the nation per capita spending. He cited our position as the second highest ranked state and local taxed state in the nation.

On TV last night, a legislator said that her legislative committee had no choice but to look at budget cutting to bring Maine more into line with national averages. Then this morning, in a TV news clip Governor Baldacci used the word average as what the goal for spending should be.

Reporting for the Times Record on Monday’s Maine Center for Economic Policy summit on government spending, Victoria Wallack outlined some of the places that Maine spending is above average. She pointed out that Richard Silkman, the vice president of a think tank called Maine Public Spending Research Group and a speaker at the meeting, said that to become average, Maine must begin spending at the national level.

The most spending in the state’s budget is in education and the Department of Health and Human Services (DHHS). Calling it simple arithmetic Silkman’s figures, for example, showed that 180 million dollars could be saved by a slight increase in student-ratio of fewer than 3 students and reducing students identified as having special needs by about 4%.

Maine spends almost twice as much per person on MaineCare, Maine’s version of Medicaid, than the national average. Cutting that to the average could save about $300 million in state spending and cutting the number of recipients by about 4% to the national level could save another $167 million.

These are just a few of the ways the state could cut its spending and thus lower the tax burden on its citizens. I would suspect that much more savings could be found in many other state departments. The suggestions at the summit have drawn tepid reactions at best, although as I mentioned earlier, there is some recognition at the legislative level and in the governor’s office of the need to move toward average.

It would be a very safe bet that the state’s educators and clients of DHHS will fight any changes. Those affected by any potential cuts in other budgets probably would put up equally vigorous opposition.

The Maine Legislature is faced with a huge revenue shortfall for its current biennial budget and, without some serious changes, probably will face even more shortfalls down the road. It will take some difficult decisions to institute change, and with the governor’s vow to veto any tax or fee increases designed to raise more money to cover the deficit it will be a difficult session for the Maine Legislature.


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