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In 2003, state's budget is key issue (Maine State budget deficit is now $2 billion)
Portland (ME) Press Herald ^ | 12/29/03 | MATT WICKENHEISER

Posted on 12/30/2002 6:48:04 PM PST by ozone1

In 2003, state's budget is key issue

By MATT WICKENHEISER, Portland Press Herald Writer

Copyright © 2002 Blethen Maine Newspapers Inc.

Five intertwined issues will dominate Maine's immediate economic future, affecting businesses and residents alike, according to a state agency charged with keeping an eye to the future.

The topics, listed by the Maine State Planning Office in its new "Maine Issues for the Future" report, include improving government efficiency, building a knowledge-based economy, reforming taxes, population trends and the state budget shortfall.

Each is a critical part of the state's future. And all five are intertwined with each other and with other aspects of the broader economy.

Still, the estimated $2 billion state budget gap definitely tops the list of priorities, said state economist Laurie Lachance. How the government addresses that shortfall will have enormous implications on commercial issues such as taxation, employment, economic development and government contracts.

"That's really going to shape the discussions of the Legislature and the incoming administration more than over the next six months," said Lachance. "It's truly going to be over the next two years as they try to struggle with this gap that appears to be over $2 billion. It's unfortunate; it's not the way for any administration to start. It places tremendous limits and tremendous pressure to come in and hit the ground running absolutely quickly."

The effort to cover the budget gap is interwoven with many other economic issues, especially tax reform and improving government efficiency, Lachance said.

Those two topics are intimately interwoven, said Godfrey Wood, chief executive officer of the Greater Portland Chambers of Commerce.

"I don't think there's any point in even thinking about tax reform until you think about restructuring the cost of services. It's the cost that drives the taxes," said Wood. "It's a huge issue for business, it's more of an issue for the citizens of the state."

Inefficiency comes from duplication of effort and lack of efficient purchasing among the state, local and county levels of government.

The culture of Maine communities taking care of services at a local level is deeply ingrained, Wood and Lachance said. But that commitment comes at a cost.

"It's not just about control. In many instances, it's about community identity, and that sense of a scale of community in which you operate, that you do have influence," Lachance said. "Unfortunately, it becomes a very expensive way to deliver certain services.

"From an economist's point of view, I do believe it is in the best long-term interest of Maine - not just short-term to solve this budget crisis - to wherever possible try to trim the costs of delivering government services. Some of that has to come from efficiencies in regional operating, it absolutely has to."

Wood and Lachance both advocate a comprehensive look at tax reform, rather than individual proposals such as the property tax referendum proposals that may come before voters.

Lachance has been working with former House Speaker Michael V. Saxl's advisory council on tax reform, and is impressed with the proposal that's emerged.

The plan generally reduces the high end of income taxes, removes the personal property tax on machinery and equipment, broadens the sales base and establishes a circuit-breaker program to keep Mainers' overall tax burden at a manageable level.

"At the least this is a proposal that has a lot of merit, and I hope that people do take it seriously," said Lachance. "As a package, if we can somehow prevent ourselves from peeling away pieces of it, it does achieve many good things on moving us forward."

Wood said his organization has also come up with a reform proposal, which leans toward a spending cap, rather than a property tax cap. And reforming the tax system could help businesses increase their spending on innovation.

"Our industries in Maine do not put a large amount of their income into R&D," said Lachance. "Some of that ties into other issues - when there are other costs of doing business that are a bit out of line, those investment dollars go someplace else."

But even as the state works to cut business costs, it also must remain focused on providing educational opportunities to its young people and reversing demographic trends that have led to too-slow growth in Maine's work force.

"We absolutely need to keep focusing on the post-secondary education piece, a strong K-12 and on to college," said Lachance. "That's half the puzzle. The other half is to create a business climate that's vibrant enough to attract the young workers and get them to stay."

Staff Writer Matt Wickenheiser can be contacted at 791- 6316 or at:

mwickenheiser@pressherald.com


TOPICS: Business/Economy; Extended News; Front Page News; Government; US: Maine
KEYWORDS: budgetdeficit; maine; socialists
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Seems like the only one worried about this are the economists. Haven't heard a peep from our elected officials about the increase in the deficit from 1 billion to 2 billion.

Maine already has an income tax, sales tax, excise tax and collects more money from cig taxes than corporate taxes cause there aren't any profitable business left up here. Gov-elect Baldacci (Rat) is still claiming to be able to fix this without raising taxes (Bwahahahahaha)

1 posted on 12/30/2002 6:48:04 PM PST by ozone1
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To: ozone1
Send more Somalis.
2 posted on 12/30/2002 6:49:22 PM PST by AEMILIUS PAULUS
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To: AEMILIUS PAULUS
"Send more Somalis."

But they are an asset to the community. Look at the all welfare workers that have been hired.
3 posted on 12/30/2002 6:53:00 PM PST by ozone1
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To: SheLion; metesky; Madame Dufarge; mlmr
Your buddy Baldacci is ignoring this.
4 posted on 12/30/2002 6:54:09 PM PST by ozone1
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To: ozone1
BENJAMIN FRANKLIN said: ‘One of the greatest tragedies in life is the murder of a beautiful theory by a gang of brutal facts’.
5 posted on 12/30/2002 6:58:28 PM PST by Positive
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To: ozone1
LOL! LOL!
6 posted on 12/30/2002 7:00:31 PM PST by AEMILIUS PAULUS
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To: ozone1
Lots of talk about how to deliver "services," how to take local control away to make the delivery of "services" more efficient; throwing more money at educrats. Just tinkering with the details of the underlying socialist philosophy.

It'll take the equivalent of an alcoholic hitting bottom for our rulers to even begin to get it.

How long, oh Lord, how long?

7 posted on 12/30/2002 7:04:03 PM PST by Madame Dufarge
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To: Positive
Our poor Governor elect (RAT) and Senate (RAT controlled) and house (RAT controlled) are going to have a fun time getting out of this one without getting the blame.
8 posted on 12/30/2002 7:04:37 PM PST by ozone1
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To: Madame Dufarge
These morons think they can solve the budget crisis by regionalization of schools.

Bwahahahahahah
9 posted on 12/30/2002 7:06:05 PM PST by ozone1
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To: Madame Dufarge
I think this will finally be the bottom.
10 posted on 12/30/2002 7:06:48 PM PST by ozone1
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To: Madame Dufarge; metesky; SheLion; mlmr; ME Hatchet
Get out your pots and pans, we are going to have some freepin to do. See if we can wake up the devil at the Blaine House.
11 posted on 12/30/2002 7:09:52 PM PST by ozone1
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To: ozone1
Watch how many of the paper mills say good bye over the next 4 years.
Watch the two mills that are closed in Millinocket/E.Mill'k't right now, you may not see either reopen reguardless of what the news says...
Before the election I was running 5 to 6 weeks behind in work, within 2 weeks after the election I was down to a flat 5 day 40 hr week...
Naw, businesses not upset much, woods related businesses headed out like rats off a sinking ship...
And the real fun hasn't even started yet
12 posted on 12/30/2002 7:11:12 PM PST by spartan68
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To: spartan68
Bucksport is closed as well.
13 posted on 12/30/2002 7:12:07 PM PST by ozone1
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To: ozone1
It seems several states are facing budget deficits this upcoming cycle. In Texas I've seen projections somewhere between 5 and 12 billion dollars with 7 billion being what's expected. The state has a $114 billion dollar budget but only $61 billion is state produced or controlled. It's going to be fun watching the legislature try to reorganize spending to meet the level of income.
14 posted on 12/30/2002 7:12:59 PM PST by deport
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To: deport
The Maine deficit is 20-40% of the budget. The biennial is only $5 billion.
15 posted on 12/30/2002 7:14:30 PM PST by ozone1
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To: spartan68
The Baldacci (D-ME) Psalm or The future of Maine
As Maine Goes ^ | 07/25/2002 | Friend of Fred


Posted on 07/25/2002 11:11 AM Eastern by ozone1


Governor Baldacci is my shepherd. I shall not want.

He leadeth me beside still factories.

He showeth me empty stores.

He restoreth my doubt in government budgets.

He guideth me to the path of unemployment.

He annointeth the legislative budgetmakers, so that my tax burden runnethover my income.

He giveth in to the MEA agenda for schools which teach not the three Rs.

He giveth in to the enviros who maketh a National Park of my home.

He giveth me jobs waiting table on people From Away who can afford vacations.

Surely, poverty and hard living shall follow the Baldacci Administration and

I shall liveth in a trailer forever.



And he hasn't even taken office yet.
16 posted on 12/30/2002 7:26:17 PM PST by ozone1
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To: ozone1
Bwahahahahahah

Bwahahahahahah

17 posted on 12/30/2002 7:27:38 PM PST by Madame Dufarge
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To: ozone1
Will be interesting to see what happens with Ray Richardson and crew with the referendum on the 03 ballot, that could but a few real nasty knots in commie johnny's shorts
18 posted on 12/30/2002 7:35:55 PM PST by spartan68
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To: spartan68
but=put ... getting late
19 posted on 12/30/2002 7:37:35 PM PST by spartan68
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To: ozone1
"I don't think there's any point in even thinking about tax reform until you think about restructuring the cost of services. It's the cost that drives the taxes," said Wood

Don't even consider that the slavish devotion to delivering "services" might be driving the whole problem.

N-o-o-o-o, let's just figure out a more efficient wealth redistribution plan, funded by the last two people not working for the state government.

No, there's no point in even thinking about tax reform as long as one there's even one tiny unmined liter of blood to be drained from the last productive citizen.

20 posted on 12/30/2002 7:39:45 PM PST by Madame Dufarge
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