LePage ignites another budget battle with rainy day fund proposal

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Good morning from Augusta, where Republican Gov. Paul LePage has ignited another election-year budget battle.

I know you thought the two-year state budget was set last year, so what’s this about another battle? Let me explain.

LePage pre-empted legislative debate Monday when he announced he will submit legislation to deposit more than $72 million in surplus revenue into the state’s rainy day fund. The state’s Revenue Forecasting Committee announced the projected surplus — which means tax collections have come in higher than expected — on Monday.

LePage’s proposal requires legislative approval, which will undoubtedly lead to disagreements about whether the full amount should be set aside or whether some of it should be spent for things like public school funding or to cover tax breaks that lawmakers are considering — and LePage favors — as part of a tax conformity package that would align Maine’s tax code to changes enacted late last year by Congress.

Having more money than budgeted is a good problem for the state to have, especially compared with many recent years when lawmakers and the governor scrambled to fill revenue shortages.

Maine’s rainy day fund — which is set aside for unexpected expenses and to cover dips in revenue caused by economic problems — currently has about $111 million in it, according to LePage. That sounds like a lot but it is only about 3.3 percent of the more than $3 billion that Maine’s state government spends every year. As recently as 2009 — a year after the nationwide financial collapse of 2008 — the rainy day fund was nearly zeroed out.

LePage has been consistent throughout his tenure about building up the balance in the fund. But in the legislation proposed Monday, he is doing more than just depositing excess revenues in it. It appears that LePage is recommending the state forgo its end-of-year budget “cascade,” which funds a range of programs and services, but only if there is excess revenue to do it. LePage has said repeatedly in the past couple of years that he would like to eliminate the cascade completely. In fact, he said in 2014 that he would propose ending the cascade during the current biennium.

There was language in the biennial budget bill passed last year by lawmakers that eliminated the cascade, but that doesn’t mean the fight is over. The fact that the governor proposes depositing the entire revenue surplus in the rainy day fund is an indication that he is moving to continue freezing it out.

In 2015, the Legislature raised the cap on the rainy day fund — known formally as the budget stabilization fund — from 12 percent of total general fund revenue to 18 percent. That means there could be up to approximately $600 million deposited in the fund.

(CORRECTION: An earlier version of this post stated incorrectly that the statutory cap on the rainy day fund had not yet been raised to 18 percent.)

So that’s what I mean when I predicted another fight in the Legislature. LePage will brand Democrats and others who propose doing anything other than putting every penny of the money in the rainy day fund as “socialists” who are “raiding” it.

While it remains to be seen how lawmakers will propose to use the money — Democrats have been advocating for giving more than $20 million to public schools this year to cover shortfalls for some districts caused by local revaluations and lost enrollments, for example — bank on the fact that this will be a battle that will probably rage until the end of the session.

It’s a bigger skirmish in the war between LePage and legislators over how Maine state government handles the money it collects.

The House and Senate convene at 10 a.m. today, and there is an afternoon full of committee work on a number of bills, which you can see by clicking here. — Christopher Cousins

Two Republicans leaving Maine Senate

Sen. David Burns, R-Whiting, announced Monday that he’s not running for re-election in 2016 and Sen. Earle McCormick, R-West Gardiner, has filed as the treasurer for a Republican looking to replace him.

McCormick hasn’t formally announced that he’s not running, but his backing of Maureen Blanchard, a Gardiner city councilor, means that the sixth-term legislator’s time in Augusta is probably up.

Burns, a fourth-term lawmaker who is serving his second term in the Senate, said he wants to “spend more time at home in Washington County with my family and focus on my community work there.”

Rep. Joyce Maker, R-Calais, announced that she’ll run for Burns’ seat against Democrat Rock Alley, who has been a leading proponent of the lobstering industry. Two Democrats, Gardiner City Councilor Terry Berry and George O’Keefe of Winthrop, have filed to run for McCormick’s seat. — Michael Shepherd

LePage remains mum on voter-approved senior citizen housing bond

Last week, you read in the Daily Brief about some members of the Maine State Housing Authority questioning Gov. Paul LePage about whether he will support the sale of $15 million in bonds approved by voters in November 2015 to benefit senior citizen housing projects across Maine.

LePage has not responded to the authority, as far as I know, nor to questions I posed to his administration last week.

Now, the Maine Affordable Housing Coalition is asking the same questions. “Efforts by MAHC and its partners to secure even a stated intention by the governor of releasing the senior housing bond have, to date, been fruitless,” reads a news release from the coalition.

“Maine’s voters overwhelmingly voiced their support for the use of state bonding resources to address what has become nothing less than a housing crisis for our seniors,” said Greg Payne, director of the coalition. “While we wait for the state to move forward in implementing the bond, that crisis only grows.” — Christopher Cousins

Quick hits

  • Republican Sen. Tom Saviello of Wilton will release details this morning of his proposal to expand Medicaid in Maine under the provisions of the federal Affodable Care Act. While the bill faces a tough slog in light of Medicaid expansion already failing five times under LePage, Saviello has included provisions designed to attract Republican support. Read the BDN’s advance of the event by clicking here, or if you like suspense you can wait until the reading list below.
  • Maine will begin using new voting devices during the June primary, according to the Associated Press. The new system involves a video screen and a built-in ballot printer and will offer voters both an audio and a visual ballot. Voters can make their choices by touching the screen or with controls which feature Braille labels. The new system will be available at all voting places. Maine’s primary election, which is for a range of elections not including the presidential, is on June 14.
  • Democratic presidential candidate Bernie Sanders opened his fifth campaign office in Maine a few days ago, this one at 6 Chestnut St. in Augusta. Troy Jackson, who is Sanders’ Maine campaign co-chairman, said it’s an indication that Sanders might still be neck-and-neck with fellow primary candidate Hillary Clinton when Maine Democrats caucus on March 6. “Maine could be, for the first time in my time doing this, a state that is very much in play,” said Jackson. Sanders also has offices in Portland, Bangor, Lewiston and Dover-Foxcroft. Clinton has campaign offices in Portland, Lewiston, Bangor and Augusta.

Reading list

There are better boy bands

Yesterday, the soundtrack for the Daily Brief was topical, but just horrible. Mike Shepherd and I apologize for making you listen to “Hangin’ Tough” by New Kids on the Block, but Mike chose it because former “band” member Donnie Wahlberg had endorsed Republican presidential hopeful Marco Rubio.

Like that’s some kind of excuse. I remember hating NKOTB in middle school, but it was more for the fact that most of the girls I knew were in love with them and not with me. Listening to that song again after all these years was just a terrible experience.

Boy bands are in general way outside my musical tastes but I do appreciate anything that’s well done, regardless of genre. And yes, that includes boy bands. I did some research yesterday — which means I asked a question on my Facebook page — about the very best boy band song. Responses ranged from “Motown Philly!” to “this is like asking me what is my favorite dental surgery.”

Boys II Men and NSYNC received several votes, but then my wife suggested “No Diggity” by Blackstreet, which for my taste is the best song that came up in my “research.” However, I chose to go with something else (for one thing, I was deterred after researching what “I got to bag it up” means).

Then a friend of mine — with whom I have spent many, many hours sitting around and listening to YouTube music clips — suggested a song I don’t know: “Mr. Telephone Man” by New Edition. I don’t like the song and my first response to my friend was “Really, dude? DUDE.”

This is how he responded:

“New Edition spawns: Ralph Tresvant went on to sing Candy Girl, Bell Biv Devoe, Johnny Gill and Bobby [flippin’] Brown,” he wrote. “Blackstreet spawns: I don’t know any of those dudes or anything they did after.”

I can’t argue with that, so New Edition it is. Apologies to all the “Bye, bye, bye” fans. — Christopher Cousins

 

Christopher Cousins

About Christopher Cousins

Christopher Cousins has worked as a journalist in Maine for more than 15 years and covered state government for numerous media organizations before joining the Bangor Daily News in 2009.