Governor’s Address 1/12/13
Hello. This is Governor Paul LePage.
These are challenging and difficult times. Our State is facing a fiscal crisis and we need to examine our spending practices, evaluate the delivery of services and gain control of our welfare system. Maine’s economic security and future is at stake and we must make hard choices so we do not leave our children with unmanageable debt.
My challenge as Governor – and our challenge as a State – is to find ways to help Maine families prosper, improve the business climate, foster better educational opportunities while still protecting the most vulnerable.
Maine, like many States, is facing additional hardship because of the sluggish national economy and the burden felt from deep cuts from the federal government. Maine already has one of the highest tax burdens, so it is imperative, as we go through the budget process, that we resist the option of raising taxes on hardworking Mainers.
The federal government established many of the welfare programs that Maine people are enrolled in. States were enticed to participate by high federal match rates that subsidize the cost. But now with the feds debt load, above $16 trillion, matching funds for programs like Medicaid are being reduced, placing an added weight on the backs of Maine taxpayers.
For all the talk of stimulus from the federal government, the fact is that they are putting Maine in deeper debt. Maine must find its own path through this crisis. We must bring our spending in line with our revenues.
My budget proposal before lawmakers includes necessary reforms and achieves a budget that meets the needs of people while protecting our financial and economic security. This budget minimizes impact to education. It is an opportunity to redesign programs and right-size government. It also allows us to gain control of how we spend money and make necessary systemic changes.
This problem did not develop overnight and cannot be fixed overnight. The process to overhaul and review our welfare programs to something we can afford is an enormous and unpleasant task. However, getting our fiscal house in order is a
necessary step in creating a better business climate with good paying jobs with higher wages. Because we are faced with a severe budget situation and rising welfare costs, we need to work together to do what is in the best interest of the Maine people.
Nearly eighty-percent of taxpayer money is allocated to two departments: health and human services and education and skyrocketing costs in these two areas affect other agencies and valuable programs.
For example, in the past decade, the state share of welfare spending has grown from nearly $500 million in 2002 to $1 billion in 2012. That is unsustainable.
Two years ago, this administration made it a priority to invest an additional $63 million into education. This year – though general purpose aid to schools is still higher than when I took office, we have had to make cuts.
While the federal government has not had a real budget in years, as Governor I am responsible for ensuring Maine has a balanced budget. This has meant State government has had to tighten its belt significantly. Local municipalities must do the same. Towns and cities will feel the effects of this budget through a temporary loss of revenue sharing. I commit to you here that we will restore revenue share as soon as this economy improves.
The State has made considerable efforts over the past two years to help municipalities stay afloat during the most challenging fiscal time since the Great Depression. However, the loss in revenue sharing in this proposed budget is a reflection of growth in welfare in Maine.
We made difficult choices to balance this budget. Some worthwhile programs are not funded – some have seen major reductions – and we’ve prioritized your tax dollars on maintaining a safety net for the most vulnerable.
In our continued effort to right-size state government, this proposal eliminates about two-hundred state jobs and seeks to achieve an additional $30 million in savings by eliminating the lowest-value programs.
We’ve modified tax exemption programs like Circuit Breaker and the Homestead tax exemption to focus on the elderly and on veterans who serve our country.
There is no doubt about it – while there are a few bright spots in this budget, these were not easy decisions to make. But in the long-run, these choices are necessary to protect the future of our children and grandchildren, and create a plan for spending your tax dollars that is fiscally responsible and will set us on the path to recovery.