The Maine Wire
  • News
  • Commentary
  • Maine Wire TV
  • About
  • Contact
Facebook Twitter Instagram
Trending News
  • Mills’ Late-Term Abortion Bill Gets Last Minute Work Session for Thursday Afternoon
  • Maine Republicans Score Tentative Victory in Delaying Trans Trafficking Bill
  • Lawmakers Nix Public School Transparency Bill Favored by Bipartisan Majority of Mainers
  • Asylum Seekers Staying in Sanford Inn Will Soon Have to Find Another Place To Stay
  • Chellie Pingree Says “No One Is Coming For Your Gas Stove” But Daughter Hannah Pingree Disagrees
  • New England Energy Prices Have Increased as Demand Has Declined Due to Climate Policies, Report Finds
  • Gardiner High School Implements Controversial New “American Flag Only” Policy Following Student Clash
  • Taxes in Portland Could Rise by 10 Percent If State Declines to Help With Asylum Seeker Crisis: WGME
Facebook Twitter Instagram
The Maine Wire
Login
Thursday, June 8
  • News
  • Commentary
  • Maine Wire TV
  • About
  • Contact
The Maine Wire
Home » News » Op-Ed: An Opportunity For Fiscal Responsibility
Commentary

Op-Ed: An Opportunity For Fiscal Responsibility

Steve RobinsonBy Steve RobinsonMarch 10, 2013No Comments4 Mins Read
Facebook Twitter Email LinkedIn Reddit
Share
Facebook Twitter LinkedIn Email

By Rep. Kathleen Chase (R-Wells)

If most of us won a small lottery and received monthly payments over 10 years, we would not simply spend that money on dinner out and fancy new cars.  We would do something smart with it, such as pay off the home mortgage early or invest for retirement.

In other words, we would try to do something fiscally responsible.

The State of Maine is faced with a similar choice.  We are fortunate to have an opportunity to realize an extra $30 million or so per year since our current contract on the state’s liquor business is expiring next year.  We have seen how much money the state has missed out on since it sold 10 years of that revenue stream to a private business so that we could patch up a budget shortfall in 2004.

The next few months will determine whether we take the fiscally responsible course or squander this state asset once again.

The Governor has proposed that we use the liquor revenue stream to issue a revenue bond—a bond that does not hurt the state’s credit rating and whose revenue source can’t be spent by the Legislature—to pay $180 million of the state’s Medicaid debt to Maine hospitals at once, triggering roughly $300 million in federal matching dollars to pay the rest of the debt.

This approach has several benefits.

First, it secures those federal matching funds, which are dwindling every year.  In 2010, the feds matched 75 cents on the dollar; today, they match 63.  The longer we wait to pay this debt or any portion of it, the more we pay in the long run.

Second, it boosts our economy and creates jobs.  Paying off our hospital debt would inject almost $500 million into some of Maine’s largest providers of good jobs.  Hospitals have been laying off employees, freezing wages and benefits, delaying construction projects and equipment upgrades, and, in one case, even closing down a maternity ward because of these unpaid bills.

Third, it protects our credit.  If we issue any more general obligation bonds before paying off the hospital debt, we face a credit downgrade.  There is currently a voter-approved, $100 million transportation infrastructure bond waiting to be issued.  We can issue this bond and create untold construction jobs while repairing our crumbling infrastructure and saving taxpayers millions by preserving our good credit, but only if we retire the hospital debt first.

In short, the Governor’s plan pays off a major state debt, leverages valuable federal matching dollars, creates jobs, and preserves our credit rating.  It also simply does the right thing by paying our bills.

The alternative is to let the liquor revenue go into the state’s general fund.  If there’s one thing I’ve learned serving on the Legislature’s budget-writing committee it’s that state government has an insatiable thirst for revenue.  The Department of Health and Human Services (DHHS), Maine’s welfare agency, has almost doubled its spending over the past 10 years.  It now consumes almost half the budget and has given us a $400 million cost-overrun, accounting for most of the total budget shortfall, for the current two-year budget cycle.

The extra $30 million per year we’ll likely see from the state’s liquor business could easily be eaten up by DHHS without any real benefit to state finances, job creation, or economic growth in our state.  Also, as the Lewiston Sun Journal’s editorial board pointed out recently, Maine’s hospitals would likely never end up getting paid what they’re owed.

My Republican colleagues on the Appropriations Committee and I believe that using the state’s liquor revenue to pay our debt to hospitals—some of it owed since 2009—is not only fiscally responsible, but bold, productive, and the smart thing to do.  It’s about paying our bills and creating jobs.

Rep. Kathleen Chase (R-Wells) is the House Republican Lead on the Maine Legislature’s Appropriations Committee.

A version of this op-ed originally appeared in Portland Press Herald, Kennebec Journal, and Morning Sentinel

budget debt Fiscal Responsibility hospitals Kathleen Chase Liquor Contract Opinion
Previous ArticleHeritage Foundation: Welfare Reform is Back
Next Article Op-Ed: A Six-pack, your credit card, and the car keys, please…
Steve Robinson
  • Twitter

Steve Robinson is the Editor-in-Chief of The Maine Wire. ‪He can be reached by email at Robinson@TheMaineWire.com.

Related Posts

Mills’ Late-Term Abortion Bill Gets Last Minute Work Session for Thursday Afternoon

June 7, 2023

Maine Republicans Score Tentative Victory in Delaying Trans Trafficking Bill

June 7, 2023

Lawmakers Nix Public School Transparency Bill Favored by Bipartisan Majority of Mainers

June 7, 2023

No Comments

  1. Tom Auger on March 11, 2013 11:02 AM

    What’s the holdup?

  2. Dan Allen on March 11, 2013 11:02 AM

    Good post & a Great Idea…Would be great to see Maine take a Leadership Role in Political responsibility.

Leave A Reply

Recent News

Mills’ Late-Term Abortion Bill Gets Last Minute Work Session for Thursday Afternoon

June 7, 2023

Maine Republicans Score Tentative Victory in Delaying Trans Trafficking Bill

June 7, 2023

Lawmakers Nix Public School Transparency Bill Favored by Bipartisan Majority of Mainers

June 7, 2023

Asylum Seekers Staying in Sanford Inn Will Soon Have to Find Another Place To Stay

June 7, 2023

Chellie Pingree Says “No One Is Coming For Your Gas Stove” But Daughter Hannah Pingree Disagrees

June 7, 2023
Newsletter

News

  • News
  • Campaigns & Elections
  • Opinion & Commentary
  • Media Watch
  • Education
  • Media

Maine Wire

  • About the Maine Wire
  • Advertising
  • Contact Us
  • Submit Commentary
  • Complaints
  • Maine Policy Institute

Resources

  • Maine Legislature
  • Legislation Finder
  • Get the Newsletter
  • Maine Wire TV

Facebook Twitter Instagram Steam RSS
  • Post Office Box 7829, Portland, Maine 04112

Type above and press Enter to search. Press Esc to cancel.

Sign In or Register

Welcome Back!

Login below or Register Now.

Lost password?

Register Now!

Already registered? Login.

A password will be e-mailed to you.