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  • State Stimulus Bailout Already Covering Up Incompetence

    The federal stimulus package is allowing the Governor and Legislature to put off making the hard and necessary decisions to put Maine’s economy on a sustainable, long-term financial footing. For example, recent research by The Maine Heritage Policy Center finds that the state workforce is both over-employed and over-paid when compared to national averages. A restructuring of the state workforce would have saved up $435,224,338 in 2007.

    To Governor Baldacci’s credit, his latest budget does propose eliminating 219 positions—too bad he has another 4,278 to go. Instead of making additional cuts to the state workforce, the Governor has chosen to pencil in nearly $100 million the state expects to bring in from the federal stimulus package.

    More disturbingly, state officials are even using the stimulus money to cover-up their own incompetence. Recently, the Maine State Legislature’s Appropriation Committee was informed that an accounting error has led to a double-counting of revenue to the tune of $22 million. Their solution: Wait for the federal stimulus money to bail us out. This exchange between lawmakers and the bureaucracy reflects their underlying attitude:

    Rep. Patrick Flood, R-Winthrop, asked whether the Legislature would be setting a precedent by passing a budget that counts on money that the federal government has yet to deliver.
    ‘If we’re taking medical-care payments and using them for errors in tax collections, is that audit-worthy from a federal standpoint?’ he said.
    [Ryan] Low [Commissioner of the Department of Administrative and Financial Services] said it is not, because once the federal government starts paying a larger share of Medicaid spending, it will free up state money to cover the error.

    The Governor needs to seize the moment and begin a comprehensive state workforce restructuring rather than waiting for the federal government. If he doesn’t, then others will push their own anti-taxpayer agenda. The Maine State Employees Union has already offered their alternative – which is to raise taxes instead of cutting any state jobs. This is particularly hard to defend, when the average Maine worker already earns less than the average state worker. What would Robin Hood have to say about that?

    - Scott Moody is Chief Economist for the The Maine Heritage Policy Center

    Posted in Ongoing Priorities [slideshow_deploy]

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