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No More Spending, Protecting Financial Stability of State More Important, Governor LePage Says
March 16, 2016
For Immediate Release: Wednesday, March 16, 2016
Contact: Adrienne Bennett, Press Secretary, 207-287-2531
Legislators setting their sights on projected revenues that have not been collected from taxpayers
AUGUSTA – As Legislators enter the final weeks of the 127th Legislative Session, Governor Paul R. LePage today made it clear he will oppose all unnecessary spending earmarked by lawmakers who want to rob funding from the Budget Stabilization Fund.
The forecast from the Revenue Forecasting Committee (RFC) projected revenue growth in their spring forecast. The RFC forecasts a $72 million General Fund revenue increase from now through the end of the biennium. $15 million had already been allocated toward education funding when the Governor signed LD 1641, “An Act To Establish a Commission To Reform Public Education Funding and Improve Student Performance in Maine and Make Supplemental Appropriations and Allocations for the Expenditures of the Department of Education and To Change Certain Provisions of the Law Necessary to the Proper Operations of Government for the Fiscal Year Ending June 30, 2017.”
Recently, the Governor introduced LD 1606, “An Act To Provide Funding to the Maine Budget Stabilization Fund.” This bill requires the transfer of the unappropriated year-end surplus of the General Fund to the Maine Budget Stabilization Fund.
“This revenue projection represents an opportunity for Maine to restore some semblance of fiscal responsibility to state operations,” said Governor LePage. “But lawmakers are already planning to take this money before it’s even been collected. There is no amount of your money socialists won’t spend. The Maine Legislature chooses to spend 99 percent of all General Fund revenue received by the State. Just one penny of every dollar received by the State of Maine goes into savings. It’s not fiscally responsible. If legislators want to raid the Budget Stabilization Fund they could at least return the money to Mainers by reducing the income tax.”
Eight months ago, legislators passed a biennial budget that increased State spending by more than $300 million. The State of Maine spends more than $3 billion annually, and the current balance in the Budget Stabilization Fund of $111.1 million accounts for just 3.3 percent of General Fund revenues received by the State. The Federal Reserve Bank of Boston recommends Maine maintain between 10 percent and 15 percent in reserves. The State of Maine could operate for only eight days with the current balance of the budget stabilization fund.
“We have multiple referendum items on the ballot this November that will be costly to the State if passed, ranging from significant income tax increases to increasing the minimum wage. We must be fiscally prudent in our planning for the future, and right now I will not allow legislators to raid the Budget Stabilization Fund,” said the Governor.
“Bond rating agencies, such as Moody’s and Standard & Poor’s, have warned the State of Maine for years of the expensive consequences should we fail to maintain or increase the balance of our Budget Stabilization Fund,” said Governor LePage. “Our existing balance is insufficient. All too often we wait until the last day of the fiscal year to determine what money the state will put into savings. This is an irresponsible way to run a household budget or a business, and it’s an irresponsible to run a government. It is time for the Maine Legislature to show that increasing the balance of the Budget Stabilization Fund is a priority.”