By Rep. Mike Thibodeau
Two years ago, I wrote a column about the “2007 Maine Piglet Book,” which exposed wasteful spending by our state government. Now an updated version has arrived, written by the same two organizations – Citizens Against Government Waste and the Maine Heritage Policy Center. In 35 pages, the “2009 Maine Piglet Book” lays out one example after another of outrageous and irresponsible state spending.
As the subtitle so aptly puts it, this is “The Book That Augusta Doesn’t Want You to Read.” If there is one thing that the Legislature’s majority party hates, it’s an informed electorate. As a fiscal conservative, I found the book so disturbing that I decided to write another column to give you some idea of what our political “elites” have done to the state. If you want to know why your taxes are so high, here are some answers.
Let me begin with Maine’s debt burden, which is nicely charted on page six. It now stands at $12.96 billion. That’s right – billion. The state debt was $12.55 billion in 2007, so it’s up by more than $400 million in two years. If you are a resident of Maine, you are obligated to pay your share of this mammoth and growing debt.
The largest single component of the overall debt is the $5.037 billion owed to the Retiree Health Care Plan for retired teachers and state workers. It is what’s called an “unfunded liability” – a shortage of money to pay for benefits that have been promised. Politicians are notorious for bestowing generous benefit packages to win votes. They know there’s no money to make good on these promises, but they are confident that when the debt bomb eventually detonates, they will be long gone from the legislative scene. It’s like leaving a giant stink bomb in the State House and then sneaking out the back door, leaving other hapless souls to deal with the disaster.
In the last Legislature, two Republican senators submitted bills to mandate a schedule to pay down this debt before it goes completely out of control. It has grown by more than $200 million just since 2007. The majority party (the Democrats) killed both bills, apparently unwilling to face economic reality. Maine taxpayers will have to dig deep to bail out this monstrosity.
Mind you, the other major program for state retirees, the pension fund, is itself in debt to the tune of more than $3 billion. In the late 1990s, alarmed taxpayers successfully mounted a referendum for a constitutional amendment to force the Legislature to pay off this debt over 30 years. By the time it is retired, in 2028, the cost to taxpayers, including interest, will reach $7.9 billion. Left to their own devices, without the constitutional constraint, the majority party surely would have let this debt escalate to ruinous proportions, just as they are doing today with the health insurance debt. (I place the heaviest blame on the majority party because they have controlled the Maine House for 35 straight years.) You might not have a pension plan, but you will be paying dearly – and for years – to make sure that state retirees get the pensions they were promised.
As the “Piglet” book explains, “Maine’s devastating debt burden continues to grow rapidly, creating an environment where those future generations who might want to stay in Maine will struggle under its weight. The billions of dollars in interest on the debt the state has accrued will haunt Maine citizens and taxpayers for years to come.”
When the Legislature convenes in January, a top priority will be a supplemental budget to deal with the sharp drop in tax receipts. By law, the state budget must be in balance, but it’s now down about $50 million due to declining income and sales tax revenues. We can expect discussion of a tax increase to fill the gap, because we will be told that state government has already been “cut to the bone.”
Well, not quite. When it comes to serious spending problems, consider Maine’s huge Medicaid system, known as MaineCare. Over the last decade, Maine has expanded this program dramatically, building it up from 154,000 individuals in 1998 to its current enrollment of 270,000 people. That’s 23 percent of the state’s population under age 65, when Medicare kicks in.
It’s a noble thing to provide free medical and dental care to poor residents. The problem is that the state has built MaineCare into the second most expensive Medicaid system in the nation. We spend 90 percent more per recipient than the U.S. average, because Maine covers medical services often not covered by other states.
Last year, for instance, taxpayers paid $33 million so MaineCare recipients could get free rides to doctors’ appointments. And here’s the kicker – taxpayers were hit for $6.6 million so heroin addicts could get free rides to methadone clinics. Some of them took taxis and billed the cab fare to the taxpayers. When we are paying taxi fare for junkies, it is hard to argue to that state spending has been cut to the bone.
If Maine’s Medicaid system operated at the national-average cost per person, the state would save approximately $350 million a year. Instead, the extravagant MaineCare program is running the state into the ground. As the Piglet book puts it: “Maine’s unsustainable Medicaid enrollment has created a perpetual budget crisis, higher taxes, increased costs for medical services, underpayment of health care providers, debt from years of unpaid Medicaid bills and rationing of care for the people on Medicaid.”
This list of waste and fiscal mismanagement is only a small part of the Piglet book’s revelations. Stay tuned for a follow-up column.
State Rep. Mike Thibodeau (R-Winterport) serves on the Legislature’s Utilities and Energy Committee
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