Budgets are usually considered boring, but what many say about Maine’s biennial budget is also true: It’s a blueprint that shapes what the Legislature can do over the next six months.

Most new initiatives require funding, so if it’s in the budget, it will happen. If it’s not, you may get a bill enacted, but it will have no effect.

So the pandemic budget presented by Gov. Janet Mills on Jan. 8 carries more than usual significance. And despite dire forecasts made last spring, it maintains current spending levels without raising taxes.

There are three reasons for this dramatic turnaround. First and foremost is the record spending in two big stimulus bills passed by Congress, totaling well over $3 trillion. By comparison, total stimulus during the Great Recession of 2008, whose dampening effects lingered for years, was just $900 billion.

The economy has stayed on track this time because both parties united to make a leap of faith and bet that future growth will allow us to — eventually — tackle a mammoth national debt.

There were two local factors also benefiting Maine. One was expert leadership at the Department of Health and Human Services, which brought in revenue from federal discretionary programs many administrations wouldn’t have known how to tap.


The other factor was Maine’s reliance on its income tax, because income tax revenues tend to hold up better in recessions than consumption taxes.

Yet Maine’s income tax is far less progressive than it once was, and that’s a problem. Former Gov. Paul LePage drove the top rate down, from 8.5% to 7.15%, though he failed in his quixotic campaign to cut it by half.

As policy, it strongly resembles the breathtaking corporate income tax reduction from 36% to 21% in the 2017 federal “Tax Cuts and Jobs” bill, undertaken simply because Republicans wanted it.

Mills has accepted much lower income tax rates, saying her budget proposals “do not change tax rates and do not create new programs.” And that’s just the problem.

With a presidentially-inspired insurrection roiling the nation and the pandemic laying bare the desperate inequality experienced by ordinary Americans, this is no time to stand pat.

Senate President Troy Jackson addressed this, saying “We may have to look at our tax code.” As he put it, “A lot of people have done very well during the pandemic.”


Those are people at the top end, while those at the bottom — “essential” workers in front-line jobs — have borne the brunt of the virus, dying at much higher rates, and enduring most of the layoffs and wrenching displacements.

If you’re still not convinced, look at the practical side. California, with the nation’s highest state income tax rate, 12.3%, is running a healthy surplus, and will consider a record budget.

But in New York, where, at the behest of Wall Street, Gov. Andrew Cuomo has fiercely opposed having the rich pay more, the Legislature will confront a $15 billion shortfall.

The tremendous boosts in federal funding will fade, and we may regret doing nothing about Maine’s widening economic disparities. Even small rate increases would allow us to cut regressive sales taxes — increased under LePage to make up for lost income tax revenue.

There are other ways to right the balance between “essential” workers and those at the top, but this is one place to start.

On the spending side, too, Mills’s budget has disappointments. While providing modest increases in municipal revenue sharing and school funding, it “flat funds” the University of Maine System at its current $230 million.


This is short-sighted. If Maine is ever going to bridge its income gap with the other New England states, it will have to invest in the “knowledge economy” that provides most of the future’s good jobs.

Public universities can be engines of economic growth, and Maine has seen promising results from research in forest products and offshore wind generation, but new industries won’t come to fruition — and attract private funding — unless the state makes greater investments.

The same is true for all college, and community college, programs. At one time, state appropriations covered 70% of the university budget; now it’s just 30%.

We’ll never solve the problem of college affordability — beyond the currently trendy idea of canceling past student debt — unless the state steps up, and doesn’t continue falling back.

The Legislature will now get to work on the budget, attempting to translate the manifest public desire for change into policy. With any luck, the product it adopts in June will bear scant resemblance to a document presented, as required by law, during the most topsy-turvy week most of us have ever seen.

Douglas Rooks, a Maine editor, reporter, opinion writer and author for 36 years, has published books about George Mitchell, and the Maine Democratic Party. He welcomes comment at drooks@tds.net


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