As this Committee is too intimately aware, the state of Maine’s economy is bleak. Unemployment is high and revenues are not stable. At least one to two times per year, the Legislature must find ways to balance a budget and address staggering shortfalls. This time the magic number is $438 million. Who knows what the amount of the next shortfall will be?
Many difficult decisions must be made by this committee and others about how to close any given shortfall. Unfortunately, too often the deliberations and decisions are solely about what programs can be further cut. Minimal attention is often paid to the revenue side of the equation, which has lasting effects on Maine’s economic well-being.
Assuming, however, that members wanted to consider emergency revenue enhancing options the existence of more quality, detailed information about tax expenditures would help facilitate substantive discussions and make informed decisions.
MECEP believes that future difficult budget and tax decisions would be made at least a little easier if detailed and adequate information existed that would allow examination of the efficacy of tax expenditure programs. This resolve addresses such concerns through convening a work group to identify the purposes of tax expenditure programs and to design a mechanism to evaluate the impact of each tax expenditure program. Under such a system, the Legislature’s job of closing budget shortfalls would be made at least a little easier.
Additionally, having such information would also allow this Committee to regularly evaluate those programs that help create jobs, for example, and those that do not. Enhancing job creation is a goal we all share.
Accordingly, MECEP supports this resolve.
Dan Coyne, Fiscal Policy Analyst, speaking before the Joint Standing Committee on Taxation in support of LD 1694, a Resolve, To Increase Transparency and Accountability and Assess the Impact of Tax Expenditure Programs.