Thursday, December 12, 2013
In a previous column, I related some of the facts surrounding the huge cuts in the “core” of state revenue sharing and some of the effects on local municipalities.
Since then, various committees of the Maine Legislature and some state agencies have been working to identify more prospective cuts. Two of the major recommendations came from the Office of Policy Management, and are under review by the appropriations committee of the Legislature.
The recommendations are disturbing.
One calls for even further reduction in general purpose aid to education.
This proposal would take away another almost $10 million in fiscal year 2015 by changing the formula as calculated in the Essential Programs and Services school funding model.
Another recommendation involves converting general assistance (welfare) to a block grant program. Each municipality would be required to match dollar for dollar.
About $3 million would be saved by the state and, of course, passed on primarily to Maine’s larger cities. This is essentially a shift of welfare costs from state to municipality.
Meanwhile, the Tax Expenditure Task Force has dug in, looking for up to another $40 million in reductions.
Presentations have been made by the Office of Program Evaluation and Government Accountability, Pew Charitable Trust and the Department of Economic and Community Development.
Several different methods were suggested for organizing the work of the task force.
As we study them, we particularly like the approach of identifying 15 expenditures that have a so-called “undetermined” goal or reason for being.
The Pew Trust highlighted tax expenditure evaluation efforts of 10 states and outlined four suggestions:
• Group expenditures together that have similar goals to address potential redundancies.
• Allow certain tax expenditures to have an expedited review.
• Consider definition of “tax incentive” as a method of encouraging business activity that otherwise might not have been conducted if the incentive wasn’t there.
• Consider various ways to ensure periodic legislative review of expenditures (including utilization of “sunsets” for all economic development incentives.)
The commissioner of the Department of Economic and Community Development could not attend because of a scheduling conflict, but a representative reported about a contract between that agency and a private consulting firm.
The contract requires a comprehensive evaluation of state investments in research and development and a comprehensive review of state investments in economic development.
The governor’s office has not allowed the economic development department’s participation in the Legislature’s Appropriation Committee’s meetings, insisting instead that all communications from the department go through the governor’s office, in writing.
Under the LePage administration, there is no such thing as autonomy. The administration is not making people available to various legislative committees.
The economic development and labor departments, in particular, are being hamstrung.
The task force has its hands full in finding acceptable recommendations about how to reach its goal in further state cuts.
The task force has two goals:
1. Find $40 million in taxpayer savings.
2. Set up a process to assess progress periodically. This puts the cart before the horse, since an expensive private consultant report about the subject is not due until February.
If the task force fails in its mission, $40 million more in revenue sharing will be taken from our cities and towns.
Maine’s municipalities are holding their collective breath a second time.
Sen. Roger Katz, R-Augusta, the assistant minority leader, serves on the task force. He sponsored a bill to restore all revenue sharing earlier in the legislative session.
When contacted for comment, Katz said, “This is all about encouraging capital investment and job creation — a critical role for government. But we do need a process in place to evaluate what is working.”
This past summer, Katz, also a member of the Appropriations Committee, worked with what was known as “the gang of 11” to tweak and promote a taxation plan authored by Sen. Richard Woodbury of Yarmouth, an independent.
Maine is way overdue for tax reform. Let’s encourage Katz and the entire delegation from the Augusta-Waterville area to return to that quest.
Don Roberts is a former city councilor and vice chairman of the Charter Commission in Augusta. He is a trustee of the Greater Augusta Utility District, and a representative to the Legislative Policy Committee of Maine Municipal Association.