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Below is my most recent TREASURER'S BLOG. Please share it with your family, friends, and associates. My speaking schedule is posted on the Treasury website, where there is also a place to invite me to speak to your group. Thank you.
Fix the Problems, Then Lead
On August 16, State Senator Cynthia Dill (D – Cape Elizabeth) penned an OpEd in the Portland Press Herald. She accused Governor LePage and me for “brand(ing) Maine as an unsophisticated salvage state.” She scolded us for claiming “how bad a place Maine is compared to New Hampshire” for doing business. The Senator then touted Maine as being “among the best places to live, raise children, and start a business.”
Sometimes the truth hurts. At all times the truth is necessary. So, let’s tell some truths.
Senator Dill has been in the Legislature for nearly five years. During that time, the pension debt for teachers and state employees ballooned to $4.1 billion. The annual taxpayer contributions to pay off this monster debt were spiking. Funding for essential government services, like public education and road construction, was being crowded out.
Our new leadership team in Augusta confronted this huge debt head-on. Working with the Legislature, we slowed the growth of the retirement benefits which eliminated 41% of the debt, or $1.7 billion. This, in turn, will reduce future spending by roughly $200 million PER YEAR for the next 17 years until the debt must be paid off. The public pension plan is now more affordable for Maine taxpayers. Businesses don’t have to worry as much about taxes going up to pay for this surging debt. That encourages the creation of private sector jobs.
During Senator Dill’s first four years in the Legislature, the state budget was balanced in part by using gimmicks. Hospitals weren’t paid approximately $500 million they were owed. State employees were sent home without pay. One-time federal stimulus money was pumped into already unaffordable programs instead of reforming them.
The LePage Administration doesn’t kick the fiscal can down the street. $250 million of the hospital debt has been paid off. No more unpaid furlough days. Balance the books straight up. No more gimmicks. Entrepreneurs are attracted to states that are fiscally disciplined. Places where they don’t have to worry about tax hikes or public service cuts to pay for out-of-control debt. That helps produce private sector jobs.
During Senator Dill’s tenure, untested and unreliable wind power became the primary strategy to lower our crushing energy costs. Mainers pay approximately 16 cents per kilowatt hour for electricity. The national average is 11 cents. Windmills produce electricity at roughly 22 cents per kwh. Until wind power becomes affordable, it does little to help our energy problems.
The LePage team is exploring all sources of energy to drive down the punishingly high costs to heat our homes and run our businesses. Natural gas pipelines are underway. We’re looking to Canada to possibly import cheap, green, renewable power generated by hydroelectric dams and nuclear power plants – two sources we have all but shut down in Maine. Lower energy costs will help attract business investment and jobs.
While Senator Dill claims that Maine is a great place to do business, our companies continue their exodus because of the complicated and expensive regulatory environment. Our new team is eliminating and streamlining unnecessary and redundant regulations. This will make it easier and more predictable to start and operate a business in Maine, while also protecting our cherished natural environment. This will help create more jobs and strengthening our state “brand."
During Senator Dill’s years in the Legislature, the cost of health care for Mainers has risen to among the highest in the nation. She supported Dirigo Health, the state-run system that promised to reduce costs and improve care. The $155 million taxpayer-funded experiment failed miserably. Health insurance premium are no longer affordable for many fellow citizens and small businesses. Our new leadership team is defunding Dirigo Health and allowing Mainers to buy coverage across state lines. Over time, competition will return to our health insurance market. This will help drive down premium costs. This will help our struggling families, and help our businesses create more jobs.
Senator Dill criticizes our $150 million tax reduction package as “tax breaks to people who don’t need them.” Well, let’s see… 460,000 residents will keep more of their hard-earned money. 70,000 of our lowest earners will pay no state income tax at all. Small businesses that invest in new equipment to create more jobs will get a tax break. 90% of all Maine businesses employ less than 20 workers, and the owners are not corporate fat cats. They’re our neighbors who invest their savings to start a beauty shop, car wash, or landscaping service.
The new tax cuts fairly benefit a majority of our hard-working citizens, and contrary to what Senator Dill implies, the goal is not to make the rich richer. It’s to help the little guy who can’t move his business to New Hampshire, or his family to Florida to avoid the 7th highest tax burden in the country. We need to introduce incentives for business owners and the wealthy to keep their money in Maine so it can be used to create jobs. The financially sound and successful are best able to start or expand a business and to create jobs for the rest of us. Let’s keep them and their money here, instead of driving them and their jobs away.
Senator Dill complains about Governor LePage and me being negative about Maine’s poor business climate. Let’s be honest – there are glaring examples of our State’s problems right in front of us, and the statistics to back them up. Telling the unvarnished truth is the first step to fixing our serious problems.
Many of the new leaders in state government are from the private sector. We’re realists who have been held accountable by our customers, employees, and investors. Before desperately-needed jobs come back to Maine, we must acknowledge the poor decisions by our public officials that created the mess. Then, we must explain the new solutions to the hard-working people of Maine. That’s exactly what the new leadership team did from January through June, our first six months in office.
Since then, we’ve shifted gears. We have made dramatic changes to how state government operates. We’re now explaining how borrowing less, spending less, taxing less, and regulating less is building a business-friendly climate. These incentives will help attract entrepreneurs and the jobs they create. This will better help us keep our kids here.
Mainers are smart. They get it. They know why too many our young leave for better opportunities elsewhere. They know why too many of our retirees change their state residencies and leave for six months per year, plus one day. It’s our responsibility in state government to help reverse these unhealthy trends.
Quality of life must include a paycheck. Maine shouldn’t be a place just for those who can afford it. The new leadership team in Augusta is working at a breakneck speed to put the pieces in place for long-term prosperity. We need everyone’s help and support, including that from Senator Dill. We can do this, together. Then, and only then, can we honestly and proudly proclaim Maine to be a great state to live, raise children, and start a business.
Maine State Treasurer