Mills’ Delusional Budget is a Rotten Deal for Working People

The state of Maine is staring down a $450 million “structural deficit” for the 2026-2027 fiscal year.

“Structural deficit” is the term government employees use when the state’s economists are predicting money allocated by lawmakers or spent by Gov. Janet Mills will be nearly half-a-billion short of the revenue collected in taxes.

It’s kind of like saying that you have a “structural deficit”—as opposed to a problem—when you’ve got $37 in your checking account but you were planning on spending $2,000 on cocaine, DraftKings, and strippers over the weekend.

The massive spending crisis follows the state’s unprecedented spending binge the previous two-year fiscal periods.

Rather than a fun weekend, all Mainers got for the irresponsible spending was crony capitalism, green energy boondoggles, welfare for noncitizens, and city parks laden with used needles.

Now, Mills is telling the blue collar working class to pick up the tab.

In FY 22-23, Maine’s biennial budget was roughly $10.3 billion, while the current FY 24-25 spending plan called for $11.6 billion in spending.

To put those numbers in perspective, Republican Gov. Paul LePage’s last budget was a paltry $7.2 billion, and Mills’ first budget — signed before the COVID-19 outbreak unleashed a bipartisan federal money supply deluge — was just $7.6 billion.

Even when adjusted for unprecedented Biden Era inflation, the proposed spending is exorbitant.

To fund this record-breaking spending spree, lawmakers and the Mills Administration relied on record-breaking tax collections as well as massive tranches of federal spending.

But the federal spending has, predictably, abated along with the sense of crisis surrounding the mild, flu-like pandemic.

However, Mills’ budget proposal suggests the governor would like to continue the massively elevated levels of spending even now that the federal dollars are gone.

But why?

What’s the justification for this? Can anyone identify precisely how Mainers are better off because Mills and Democratic lawmakers spent $6 billion more than Gov. LePage would have over the previous four years? Are the roads or schools any better? Are the streets safer?

Sure, there’s a long, long list of Democrat Party allies who are a whole lot richer. But this left-wing trickle down economics hasn’t improved the lives of the very blue collar Mainers now shouldering unprecedented tax increases thanks to all the “help” they’re supposed to be getting from Augusta.

So why keep the spending levels?

If the dollars to maintain bloated state government can’t be found in Washington, DC, then the justification for the wild spending levels is all the more important. That’s because those dollars will not be located in Mainers’ pockets.

Mills proposed Friday a slate of fee increases and a massive tax increase on the poor in the form of an increased tobacco tax. (If you want any easy test to identify the true progressives versus the fraudulent progressives, keep an eye out for the Ds who go along with this regressive tax scheme.)

This is the largest tax increase proposed on Mainers since two weeks ago when Democrats celebrated the new one percent tax on paychecks — the largest tax increase on Mainers in decades, probably since Gov. Ken Curtis (D) first imposed the state income tax.

But Maine’s financial situation is even more severe than the looming revenue shortfall.

In addition to the $450 million discrepancy between what Mills would like to spend in the next two-year budget versus what Maine will likely raise for revenue, the state is also looking at a shorter-term deficit of $118 million related to welfare.

According to a letter from Dept. of Financial and Administrative Services (DAFS) Commissioner Kirsten Figueroa, the state is $118 million short in funding for MaineCare, a medical welfare program funded mostly by the federal government.

The crisis is so dire, according to the Democratic administration, that Figueroa warned lawmakers failure to cooperate with Mills’ budget proposal may cause the state to stop paying Maine’s health care providers.

MaineCare is by far the largest single program in Maine’s state budget — even though the majority of Medicaid is funded by federal dollars. It’s also one of the fastest-growing spending items in the state, even though Maine’s population has barely budged since 2013.

In that year, Maine spent a total of $2.5 billion on MaineCare, with Maine’s general fund (i.e. Maine taxpayers) paying for $870 million of that welfare spending. By 2022, Maine’s total MaineCare spending had grown to more than $4 billion. Although Mills and lawmakers will insist that inexorable MaineCare growth is fine because the Feds are picking up the tab, that’s not entirely true.

The full cost of MaineCare growth is socialized across anyone who uses health care in Maine. That’s because the reimbursement rates hospitals get for treating the welfare cases is so low, they lose money taking those patients. They have to make that money up elsewhere — those million-dollar hospital executives gotta get paid somehow — so they raise prices for privately insured patients, i.e. the working class.

In other words, everyone paying for their own health insurance sees rates increase as MaineCare grows. Like inflation and solar subsidies, the socialized cost of medical welfare is yet another sneaky tax that progressives use to finance their politics.

To carry the cocaine and strippers metaphor a little further: What Mills is calling a “budget gap” or “structural deficit” is, in fact, a spending hangover — the predictable consequence of delusional “free lunch” policymaking.

For at least four years, Mills and her Democratic allies have been stealing a little too much happiness from the future, and that bill is rapidly coming due.

The only thing that remains to be seen is whether the nominal conservatives at the State House will stage a tough love intervention or cut some deal in the dark of night at the “special” appropriations table to further enable Maine’s obvious decline.

Anyone hoping to live in Maine or raise children here should urge lawmakers to reject the governor’s delusional budget and start from scratch with the principle that Maine must return to pre-pandemic levels of spending.