We all want a financially sound state government, but Governor LePage seems bent on undermining our public services in the name of fiscal integrity.
His most recent remarks bemoaning the unavailability of state surplus funds because of the so-called “cascade” follow his attempt this spring to move a $72 million surplus into the Budget Stabilization Fund. The governor’s statements are not only contrary to prudent budget management, they reflect a decided lack of understanding about how the cascade works.
The “cascade” refers to the state law requiring the State Controller to place year-end excess revenues into a series of reserve funds, each receiving a portion of the available surplus, thus cascading into the various funds. One of these funds is the Budget Stabilization (or “rainy day”) Fund.
The rainy day fund helps the state weather economic turmoil. It provides a cushion when revenues take an unforeseen downturn. To prevent tax increases or cuts to public services during bad times, it is important that we keep the rainy day fund healthy and replenish it when funds are available.
The questions the governor should ask are not about whether or not legislators should replenish the state’s rainy day fund, but when and by how much?
In fact, the legislature acted prudently when they transferred $10 million into the fund at the end of the state’s budget year this year, only a portion of the available surplus. The governor’s persistent demand that the legislature place all and any available surplus into the Budget Stabilization Fund is short-sighted and ignores the current state of the economy. Maine still has not gained back the jobs it lost during the Great Recession and we still need to be making investments in our people and communities.
This is not the governor’s first act that undermines the public services on which Maine people and businesses rely:
- His cuts to income taxes on the wealthy, with no plan to fill the void, created huge state budget shortfalls that caused steep property tax increases and deep cuts to education and other local services.
- His cuts to state government staff have left agencies crippled and unable to serve and protect Mainers.
- His refusal to invest in infrastructure either with new bonding or with bonds that the voters had already approved increases the backlog of deficient roads and bridges, slow broadband, and ill-equipped classrooms that hamper Maine’s economic growth.
Before banking state surpluses, the governor must focus first on giving Maine children a quality education, adequately staffing law enforcement and other state services, and investing in infrastructure that will support a stronger economy.