Looming state shutdown dangerous for Maine’s economy

June 23, 2017

 

As the state’s two year budget comes due, Republican lawmakers continue to hold negotiations hostage over demands to repeal the voter approved 3% surcharge on household income over $200,000. The state is just seven days away from a potential state shutdown if a budget isn’t enacted on June 30th. Analysis released by the Maine State Employees Association and MECEP Friday shows the devastating impact a state shutdown could have on local economies. When the state shuts down, state employees do not get paid, which means less money circulates in local economies and state employee families will face hardship.

Economic Impact State Shutdown

The analysis estimates an impact of more than $2.5 million each day that a shutdown continues and workers aren’t paid. Kennebec County would bear the greatest burden in a state shutdown, with a loss of $944,000 in economic activity each day that a shutdown continues.

 

The impacts will go beyond lost or delayed paychecks for state employees. Closed state parks, halted construction projects, and an inability to get licenses, permits, and inspections for business projects will compound the economic impacts of a state shutdown beyond the figures indicated here that are solely related to payroll impacts.

 

A state shutdown would be devastating for Maine’s economy and must be avoided, but some Republicans are forcing a false choice of tax breaks for the rich or shut down. Eliminating the voter approved 3% surcharge without a progressive and sustainable revenue replacement to fund schools these law makers would set the state up for financial crisis in future years, leaving schools, healthcare, and state services to compete for pieces of an ever smaller pie.