LePage’s deficit spending
To the editor:
While the federal government can run a budget deficit (in the trillions at last count) by simply spending money that the nation does not have, the same is not true for the states.
States, like Maine, are bound by their constitutions to maintain a balanced budget, meaning projected spending cannot exceed expected revenue. That fact underlies the current discussions before the Legislature as members struggle with finding money — either by cutting programs or increasing revenue — in order to finish out this year in the black, and form a balanced budget for the next fiscal year.
Gov. Paul LePage has proposed income tax and sales tax breaks for specific groups of citizens and businesses that carry a price tag of more than $105 million — with no means of replacing that money, either through cutting programs or increasing other revenue.
LePage proposes spending money the state does not have, and thus introducing deficit spending couched as tax policy. Worse yet, he is doing this only to create political bragging rights in the short term, with payback so far in the future that no one will notice.
The governor is engaging in deficit spending, albeit pushing the fiscal effects of these proposals into fiscal 2019, long after he has left office.
The same can be said of his recent and highly publicized pledge to “do away with the income tax in Maine” — a transparent ploy to gain political favor and support from those he hopes will give him a second term.
He fails to explain, however, that as according to Rep. Seth Berry, the lead Democrat on the Taxation Committee, such an action will mean a $1.5 billion (yes, billion!) shortfall in state revenue the year it takes effect.
But no worries, that bit of deficit spending will be someone else’s problem to confront. Our governor will be long gone before the bill comes due.
Jennifer DeChant is a Democratic Party candidate for Maine House District 62.