The Center on Budget and Policy Priorities (CBPP) released a report today that details a roadmap for stronger state economies. Central to the CBPP proven prescriptions for economic growth are strengthening education and infrastructure systems. To pay for these priorities, CBPP recommends policy corrections to reduce unnecessary spending and increase revenue from high income individuals and corporations.
Since the recession, budget cuts to the education system at every level have had short- and long-term consequences for the economy. These job-killing cuts continue to force teacher and staff layoffs and undermine the ability of schools to teach basic skills and advanced education necessary to develop the future workforce on which Maine businesses rely.
The report also advocates for state investment in infrastructure to maintain and modernize the water, sewer, and transportation systems that keep our economy running and the public structures like schools and hospitals that keep working families healthy and educated. Well-maintained, modern infrastructure gives local economies and communities the support they need to grow. Maine, like many states, has crumbling roads and bridges and aging water systems that require maintenance and updating. A gas tax cut in 2011 and greater fuel efficiency has resulted in significantly less revenue for Maine’s highway fund. State level cuts to municipal aid have reduced local capacity to fix potholes, update school facilities and equipment, and make other essential investments. Updating Maine’s infrastructure will ensure that we are able to protect our past investments and help our economy grow.
The CBPP reports that the best way to fund these priorities is to make policy corrections to improve existing inefficiencies, such as those in the state criminal justice and health care systems, and by increasing taxes on those who with the highest incomes. Funding initiatives to treat and prevent drug addiction and reforming the parole system in Maine would go a long way toward reducing recidivism and spending on non-violent offenders. Similarly, accepting federal funds to expand MaineCare would reduce the amount of state spending targeted for uninsured Mainers and help low-income patients afford the care they need before conditions worsen and become more expensive to treat.
Addressing spending inefficiencies is smart policy and allows funds to be stretched farther; yet raising revenue will be a necessary component of Maine’s budgeting process to rebuild and modernize our education and infrastructure systems. The CBPP recommends that states raise revenue from high income individuals and corporations. Wealthy Mainers have received substantial income tax cuts over the last five years as the top tax rate has fallen from 8.5% to 7.15%. Restoring a higher top bracket rate for high-income Mainers and closing ineffective tax loopholes will improve the state’s ability to make policy decisions that will improve our economy now and in the future without significantly affecting the amount high-income Mainers put back into the economy through their personal purchases.