Like a high-fiber diet, good governance keeps Maine’s finances regular

Good governance is about as sexy a topic as a high-fiber diet, eight daily glasses of water, and regular exercise.

But, just as those three things are important to your physical well-being, responsible administration is crucial to the health of the body politic. It help keeps state finances regular.

Evan-Amos | Vanamo Media

Evan-Amos | Vanamo Media

Last week saw an excellent in-depth article in the pages of this paper exploring Maine’s “cash pool.” While the intricacies of state finance aren’t the most titillating subject, having the Maine bank account in the black saves all of us money. If it goes red, the state treasurer has to borrow funds — with interest — to make sure the checks don’t bounce.

From 2008 through 2015, Maine taxpayers weren’t so lucky. The General Fund kept spending dollars that hadn’t yet been collected. So we kept borrowing for short periods of time, paying interest. Of course, we also found “interest-free” financing — not paying Maine hospitals the bill run up by government programs, for instance. Not particularly responsible.

Yet, like an aircraft carrier, Maine’s finances have finally turned around; it just took time. We aren’t reading headlines about the need for tens of millions in emergency funding to carry our safety-net programs to June 30, the end of the fiscal year. Instead, we can make policy free from crisis.

That’s important. Every two years in Augusta, the largest policy document enacted by the Legislature is the state’s biennial budget. For over a decade, it jumped from shortfall to shortfall, with the “structural gap” — the amount required to be spent under existing law versus the amount forecast to be collected from taxpayers — in the hundreds of millions of dollars. Gov. John Baldacci’s tenure was in near-perpetual budgetary crisis, in large part due to the $1 billion structural gap he inherited from his predecessor, Angus King.

Damir Sagolj | Reuters

Damir Sagolj | Reuters

As we continue through the final two years of the LePage administration, there is an opportunity to take a longer-term view with the budget. That’s good; there are many large questions facing our state, the answers to which will likely chart the course of Maine’s future.

There will be a significant debate about what our tax code should look like. Question 2 and its tax increase — giving us the second highest marginal rate in the nation, behind only California — is likely to come under question. It eked out passage in November by approximately 9,500 votes; it won in Portland by over 11,000. Not exactly a resounding statewide mandate.

The other half of Question 2 — school funding — is likely to be a subject of debate as well. LePage proposes spending all state funds directly in the classroom, giving municipalities responsibility for administration. The administration proposes innovation grants to encourage, rather than mandate, collaborative regional solutions. Without a pending crisis in benefit programs, we can explore these reforms and resource them.

Of course, there will also be debates around our safety-net programs. Charges are already being levied that the changes previously made to public benefits went too far. The Department of Health and Human Services proposes refocusing more dollars on elderly and disabled Mainers, further reducing eligibility for those able-bodied adults without children. Regardless of your position on those issues, we now have a chance to make clear-headed decisions; we aren’t looking for $70 million to bail out already-promised cost overruns.

And as we try to find the appropriate places to spend tax dollars, other programs can be looked at on their merits, rather than as a source of easy money to solve an immediate problem. With a new governor taking office in 2019, the rumors of potential candidates have begun to swirl and the potential field is large. If everyone rumored jumps into their respective primary battles, we could have 15 candidates on the ballot next June. Under the so-called Clean Election Act, they would each be eligible for up to $1 million in their primary race. Are political campaigns the best use for $15 million from the public treasury? We don’t have a massive hole to fill, so we can decide that on its own merits.

State finances are boring, but they impact policy every step of the way. And regardless of what you might think about the governor or his policies, he has led Maine to a position where we can have those debates free from a budgetary Sword of Damocles.

So the reward for good governance? Knock-down, drag-out fights over ideas instead of dollars. In politics today, we’ll call that progress.

Michael Cianchette

About Michael Cianchette

Michael Cianchette was the chief counsel to Gov. Paul LePage from 2012-2013 and deputy counsel from 2011-2012. A Navy reservist, he was deployed to Afghanistan from 2013-2014 as a trainer and adviser to the Afghan National Police. He is an alumnus of the Leadership Maine program and holds a BA in economics and political science from Boston College along with a JD and an MBA from Suffolk University. He works as in-house counsel and financial manager for a number of affiliated companies in southern Maine.