Instead of cuts: guts

Raise taxes on the rich? Only one candidate says ‘yes’?
By LANCE TAPLEY  |  January 6, 2010

Fundamentally, the state doesn’t levy enough taxes to cover the services that Maine people need.

Let’s assume, reader, that you’re concerned about economic and social justice. For those in real need — people who are poor, sick, old, mentally ill, addicted, disabled — you want decent care. You’re concerned, too, about proper funding of schools, community colleges, and university campuses. And you want fair state taxes so the rich and the big corporations pay proportionally more than the poor and middle class.

 READ: Lance Tapley's "Alternatives Abound"

If you’re this kind of person, then as Maine heads into an election year you need to ask yourself: Is there any politician or group of politicians who can courageously lead Maine out of the right-wing wasteland it has been in for the last seven years? During this period Democratic Governor John Baldacci and the majority Democrats in the Legislature — joined, of course, by the Republicans — have repeatedly slashed government programs that help schoolchildren, disadvantaged people, and average citizens, and have increased benefits to corporations.

In other words, is there on the horizon any progressive leadership — with any guts? Guts are important because, unlike in many other states, and unlike Maine not that long ago, almost all politicians in Augusta now obediently follow a reward-the-rich, trickle-down, no-new-taxes (or reduce taxes) economic philosophy which it has become taboo to oppose.
First, though, let’s pause to give Baldacci a smidgen of sympathy. Hostage to his ideology, he does not appear happy in his Scrooge role. More skeletal-looking at each public appearance, he was positively ghoulish at his annual pre-Christmas program-slashing press conference as he raced through proposals for sharper cuts to education, human services, and the rest of state government.

As usual, between the fiscal knife thrusts he and his cabinet members muttered throw-away lines: Government needs “to protect the most vulnerable in our society,” and “Maine’s children remain one of our most important investments.” But their bottom lines for the current two-year budget include:

-$73 million slashed from the public schools; new rules would reduce the number of special-education students;

-$68 million taken from the Department of Health and Human Services, including a 10-percent cut to a wide variety of agencies serving the needy that have already been pared to the bone;

-$27 million in reductions to municipal revenue sharing, plus a $1.8 million cut to “general assistance” welfare for the desperately poor, the impact of which will be felt most in cities like Portland and Bangor;

-$16 million from the university and community-college systems (perhaps 100 university jobs will disappear);

-$50 million from all other agencies;

-three more payless government-shutdown days to be added to the 20 that state employees are already required to take this fiscal year and next.

Baldacci’s press-conference rhetoric reaffirmed his ideology. “The best welfare program is a good job,” he uttered twice, repeating one of Ronald Reagan’s favorite lines. He said he’d oppose a tax increase, expressing concern about “the yoke” of taxes on Mainers at the very same time he proposed, within the budget he was unveiling, to increase the tax load on low-income citizens by reducing the break they receive under the Maine Residents Property Tax and Rent Refund Program known as the “circuit breaker.” Baldacci also said he saw the program cuts as beneficial: They would wring more “efficiency” out of state government.

Their human consequences will not be beneficial. Just one cut, according to Mary Lou Dyer of the Maine Association of Community Service Providers, will result in six state social workers overseeing the care of more than 400 developmentally disabled people in a reversion to “the old boarding home system” because funds will be eliminated that now enable those individuals to live more independently and be better cared for in private homes.

A few days after Baldacci’s grim Christmas party the Portland Press Herald headlined, “City police chief warns of mental health crisis.” James Craig said his department was fielding 3000 calls a year from people threatening suicide. The state’s proposed cut to services for the mentally ill will not improve this crisis. And our present-day mental asylums, the jails and prisons, will not improve how they treat their “clients” as a result of the impending reductions in the state corrections budget.

The excuse for the cuts is the recession. The cutting has actually been going on since Baldacci took office in 2003 at the tail end of a smaller recession. Fundamentally, the state doesn’t levy enough taxes to cover the services that Maine people need. There’s no question, though, that the Great Recession has exacerbated state government’s fiscal difficulties. High unemployment and less personal consumption yield high demand for state services but lower income and sales tax revenue. Economists predict the state’s fiscal woes will continue for years.

In this predicament, Maine is not different from other states. But most other states, in addition to cutting programs, have recently enacted tax increases, as they — and Maine — did in previous recessions (see “Alternatives Abound”).

Besides appealing to the moral obligation to help the needy and the human-investment rationale of not shortchanging schoolchildren, progressive lawmakers in other states have argued that during an economic downturn, as the DC-based Center on Budget and Policy Priorities expresses it, “Tax increases take less money out of the economy than spending cuts.” This is particularly true of tax increases on the rich.

Economic studies show how money provided to the needy, their service providers, and government employees circulates quickly and locally, stimulating the economy, while much of the wealth of the well-off is saved or not spent or invested locally. The Bangor Daily News in a recent editorial recognized that shrinking the state work force — there are 1000 fewer state employees than in 2003 — is “counterproductive” in a recession. The rich also have a greater ability to absorb a tax increase without curtailing spending. They have prospered fantastically over the past 30 years, unlike the poor and the middle class, who have pretty much flat-lined it economically.

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