Across the nation, states have seen an unprecedented collapse in revenues as a result of the longest, deepest recession since the Great Depression. This causes a perplexing dilemma: how to meet growing public needs and sustain critical public investments when the resources to do so are shrinking.
The Maine Department of Administrative and Financial Services projects that the state faces a $1.17 billion gap over the next two years. Addressing this shortfall will be the most significant challenge facing Maine’s next governor and legislature. Some argue that the answer is to cut spending, and then cut it some more. But a careful analysis demonstrates that the solution is not that simple.
by Garrett Martin and Dan Coyne