Senator Dana Dow
Another two-year budget to fund the operations of state government has been passed, signed into law, and will take effect on July 1st.
Hello, I’m Senator Dana Dow from Waldoboro, Republican leader in the Maine Senate.
Throughout the budget debate, Republicans worked to ensure that the disastrous reforms proposed for the Maine’s Workers Compensation system were rewritten into a more balanced program that does not do harm to Maine businesses.
Republicans also made sure that local property owners get a break with a substantial increase in revenue sharing designed to provide property tax relief.
Furthermore, Republicans fended off several proposed tax increases, including one allowing local communities to charge sales tax; and we secured an agreement from Democrats to not spend additional funds on the more than 200 bills that were passed with a price tag of nearly a billion dollars.
Unfortunately, not all of the budget news was good.
Maine Democrats chose to spend hundreds of thousands of dollars on state government funded abortions at the expense of other important programs.
They tried to raise the estate tax. They tried to let towns and cities tax you. They even tried to tax water!
Altogether, state spending grew by 11% in this budget, though the cost of living grew by only 1.7%.
Maine workers saw their wages grow by 2.4% last year, and they have to live within their means. State government, on the other hand, somehow needed four and a half times that increase to fund all of its various programs.
Most important of all, this budget is simply not sustainable over the two years it will be in place. Democrats insisted on spending every dollar they could find, including a large surplus left over from the previous year, and another $67 million from the state’s Rainy Day fund despite the current “Sunny Day” economic prosperity.
At the end of the two years, the budget will leave just $5 million in the bank, and that’s if every rosy assumption it is based on comes true. Even a small downturn in Maine’s economy could have a disastrous impact on this budget, and there are some indications of real Rainy Days ahead.
With a growing economy, eventually the steep rise levels off. Now, forecasts show a steep decline in the increase of state revenues. There was a drop in growth of 80% just this year and a forecast that it will drop 40% again next year.
Some of these factors have already shown themselves. After years of nation-leading growth in wages, Maine has fallen all the way to 40th, a decline that began immediately after passage of the minimum wage referendum in 2016.
The prosperity that began with the largest tax cuts in Maine’s history, back in 2011, launched our state on a path of great prosperity, including huge budget surpluses every year since. This year alone, the surplus was $185 million. And yes, Democrats have already spent that, too.
Senate Republicans continue to resist the desire of Democrats to reverse those cuts, and blunt the great economic times that have followed—record surpluses, record low unemployment, higher wages, and more jobs.
Over the next two years, as state government moves forward under this budget, Senate Republicans will continue to fight for a common sense, sustainable government in Augusta. One that gets government out of the way of those who really make our economy succeed—the people and businesses of Maine who work hard every day to make our great state grow and prosper.