January 2009 Archives

The $825 billion (and growing) stimulus package working its way through Congress contains a dramatic expansion of Medicaid, which entitles anyone laid off and receiving unemployment, regardless of income or assets, to be on Medicaid at the federal government's (read: the taxpayer's) expense.

Here is a description from a New York Times article about this $11 Billion Medicaid expansion: "With little notice and no public hearings, House Democrats would create a temporary new entitlement allowing workers getting unemployment checks to qualify for Medicaid, the health program for low-income people. Spouses and children could also receive benefits, no matter how much money the family had....Democrats said the current economic crisis did not allow time for public hearings on the legislation."

Consider this (according to the NYTimes):

• The economic stimulus bill prevents states from enforcing a means test, saying, "No income or resources test shall be applied with respect to any category of individuals" who become eligible for Medicaid because they are receiving unemployment benefits.
• The federal government would pay 100 percent of the costs for people enrolled under this option through December 2010.

What incentive would someone on unemployment have to accept a job offer for a position without health benefits (or less than Medicaid-level coverage)?

How much would the federal government expand the dependency culture as a result of providing Medicaid coverage to those at any income or asset level - simply because these individuals receive unemployment for a period of time?

According to the US Department of Labor, there are 30,293 people in Maine receiving unemployment for the most recent week ending January 10, 2009.

That means up to 30,000 more people on Maine Medicaid for this "temporary new entitlement." 

Lastly, isn't "temporary entitlement" an oxymoron?

According to MDIschools.net, the state's best resource for school district consolidation news, of the 18 school consolidation plans that went before voters yesterday, eleven were defeated.  It will surprise almost nobody that the districts in question were almost entirely in the rural northern and eastern parts of the state, areas which have resisted consolidation efforts from the start.

The news for school choice was good.  Choice, where it is practiced now, is preserved in all of the consolidation plans that passed.  A consolidation plan for Hermon and MSAD 23, which would have ended school choice in MSAD 23, was soundly defeated by voters there last week.

So, the next move is the state's.  Presumably it will impose penalties on non-conforming districts, and it remains to be seen what the political ramifications of doing so will be.  Because most districts were either exempt from the law or have complied in some way, there will likely be little support in the legislature for lifting the penalties, which leaves the two sides at an impasse - voters won't approve consolidation plans, the state will likely continue to insist that they do.

Now what?

The mission of the Con Law Center is to protect private property rights in Maine and restore economic freedom by challenging illegal state laws and local ordinances.  In practice - we provide legal representation to individuals, property owners and small business owners whose constitutional rights are being violated by state or local governments.

The Con Law Center is the new advocate for Maine's entrepreneurs, small businesses, and property owners who do not have the necessary resources and time needed to organize a legal challenge when their constitutional rights are threatened.  The Maine Legislature, state agencies, local officials, committee members, and town employees too often believe their decisions cannot be questioned - but now the ordinary citizens have a new voice.



I will be pursuing cases to roll back the encroachment of state and local laws and regulations that make it hard to start or run a business and create jobs in Maine.  Most of our state's job growth is with small companies and family businesses, and my job is to get the intrusive laws and regulations out of their way so they can grow.  When these companies are free to make common-sense business decisions without being denied, restricted, or second-guessed by regulators, more people get hired and have new opportunities to prosper right here in Maine.

If you believe you are in a situation where your Constitutional Rights are being restricted by a state or local law or official, please go to the CASE SUBMISSION FORM in the "Latest Research" section of the site's CON LAW tab. 

The Heritage Foundation (no association with The Maine Heritage Policy Center) is running a series on the negative impact of the federal stimulus package on states based on responses from on-the-ground state think-tanks across the country.  MHPC's submission is now on-line, check it out here.

According to an article this morning in the Portland Press Herald, Governor Baldacci has included in his new budget proposal to increase various hunting and fishing licenses to raise an additional $4.1 million.  Call them whatever you want to, but at the end of the day these are tax increases.

But don't take my word for it, the U.S. Census Bureau classifies "Hunting and Fishing Licenses" as taxes.  And this is not the first time that the state government has tapped hunters and fishermen (and women) for more money.  In this report, I found that between FY 2002 and FY 2007, revenue from "Hunting and Fishing Licenses" has increased by 100 percent to $17.1 million in FY 2007 from $8.5 million in FY 2002.  Overall, I estimate that it appears nearly $300 million in new taxes were levied over this time-period.

One would think that after the success of the "Fed Up with Taxes" campaign in November that any and all tax increases would be off the table . . . oh wait, they are calling it a fee increase to throw taxpayers off the scent.  Brilliant.

Looking for a Great Paying New Career?
Look No Further than the Maine State Government!

By Sam Adolphsen 

 

 

"I recognized early last year that the national economy was deteriorating, even if we weren't sure how bad things would get, and I took immediate action to reduce State spending," Governor Baldacci said. "Every part of state government, and the programs and services it supports, has a responsibility to share in the sacrifices imposed by this recession..." (Village Soup Story - Jan 11)

This is a common sense statement coming from the Governor, particularly while staring in the face of an $840 million budget deficit.  But have we done it?  Has state government, and the programs and services it supports, made every possible sacrifice to begin the trend of responsible spending that will pull us out of this hole?  

There is evidence to say that, no; the savings light has not shined in every shadowed corner of the Maine State Government to find savings.  This Director of Multicultural Affairs  job listing is a perfect example of a good place for Maine Government to look for additional savings.

This position is a (Public Services Manager II) position.  A search of MaineOpenGov.com DHHS payroll data yields some telling results about this position. DHHS currently employs 79 Public Services Manager II's with a combined total annual compensation of over $6,000,000.  Seeking to add Public Service Manager II number 80, Director of Multicultural Affairs, during a "hiring freeze", the State would take on an additional $71,748.98 to $94,929.63 in salary and benefits for just one position.  A better solution might be for the 79 State Employees who already hold a similar position to tag team the "Director of Multicultural Affairs" position for the time being, or leave it vacant while we deal with nearly a billion dollar budget deficit.

The first thing listed in the job description is the responsibility of "planning, coordinating, and directing DHHS programs providing services for non-US citizens".  At a time when we are struggling to get by in our own State, the State wants to spend $71,748.98 to $94,929.63 taxpayer dollars to hire an employee whose purpose, in part, is to steer non-US citizens towards taxpayer funded programs?

The job description also suggests that the appropriate candidate for this position will..."increase the cross-cultural capacity of other state agencies".  "Increase" is code for growing existing programs, adding inter-departmental programs, and possibly creating entirely new positions, all which will cost taxpayers more of their hard-earned dollars.  

Building "partnerships and collaborative work groups among the various ethnic and cultural constituent groups" is a worthwhile cause, but it cannot be a priority hiring at this critical financial time for the State of Maine.  The culture Maine needs to focus on now is one of fiscal prudence and responsible spending at all levels.

 

 

 

Sam Adolphsen is a special projects coordinator with The Maine Heritage Policy Center. 

At the press conference on the release of his budget a couple of weeks ago, the Governor referred to a new study by the McKinsey & Co. consulting firm, which he said indicates that there are millions of dollars in savings to be had if local municipalities and the newly created Regional School Units would work together more effectively.  To that end, his budget contains an initiative that would provide grant funding for such consolidation efforts, paid for by Municipal Revenue Sharing funds that would otherwise go to the towns. 

This is not the first time the governor has pushed the issue of consolidating municipal services.  Years ago, he pushed for the creation of "Municipal Service Districts," which would have regionalized municipal services such as assessing, code enforcement, solid waste management, and so forth.  It went nowhere, but the governor has remained a passionate supporter of somehow making municipal governments spend less money, in the belief that they, not the state, are the big spenders.  In keeping with his philosophy, his new budget cuts funding to the towns dramatically.

The problem is not only that research by MHPC shows that spending my Maine's local governments is lower than national averages, the McKinsey report, though it doesn't say so, also suggests that larger municipalities spend more money, not less.

An actual report from McKinsey & Co. may exist, but it does not seem to have made the rounds yet. What does exist is a PowerPoint presentation featuring highlights of the report. 

One of the McKinsey PowerPoint slides features the following chart, which purports to show the high degree of variability in per-person spending between towns of the same size.  The vertical axis shows non-education-related municipal spending per person, the horizontal axis shows the population of the municipalities studied.



What is conveniently missing from the chart is trend line showing what kind of relationship might exist between per-person municipal spending and the size of the municipality.  If, as the governor suggests, larger towns are more efficient, one would see per-person spending decline as municipality size increases. 

To test this theory, I constructed my own chart, using data from the Maine Municipal Association's 2007 Fiscal Survey Report, a collection of municipal revenue and spending information provided to MMA by nearly 200 of its member municipalities.  (Towns were not required to provide the data, so many towns, including some of the largest, are missing from the survey.)

As McKinsey suggests, there is indeed wide variability in per-person spending between municipalities of like size.  There is also a distinct relationship between the size of towns and the amount of per-person spending they do.  The larger the municipality, the more it spends:


The wide variability in spending certainly suggests a need for far greater transparency and accountability on the part of municipalities.  At the very least, towns should be required to provide, in a format that lends itself to easy comparisons,  the kind of revenue and spending data the MMA collects.

The data also suggests, though, that Maine's small towns are doing just fine holding the line on spending, thank you.  Cities like Portland, South Portland, Lewiston, Brunswick, and Auburn did not even submit data to the MMA, yet MMA's data still indicates that Maine's larger towns spend more per-person.

Bigger government has been the mantra of the Baldacci Administration from the start but there is little evidence it will save money. What will save money is transparency and accountability on the part of municipalities, counties, and the state.

According to the state, 20 RSU plans are still awaiting approval by voters, and a number of them have implications for school choice:

Alton/Bradley/Greenbush/Milford/Old Town: RSU plan would protect school choice in all towns except Old Town, which does not have choice.

Sedgwick/Penobscot/Deer Isle-Stonington CSD/Brooksville/Brooklin/Blue Hill/Castine/Surry: AOS plan would protect school choice in all towns except for Deer Isle/Stonington, which does not have choice.

Boothbay-Boothbay Harbor CSD/Bremen/Bristol/Damariscotta/Edgecomb/Great Salt Bay CSD/Jefferson/Newcastle/Nobleboro/South Bristol/Southport: AOS plan would preserve choice for all these towns except Boothbay and Boothbay Harbor, which do not have choice.

Bucksport/Orland/Verona: Plan would preserve choice for Orland, but limit it to 35% of students. Beyond 35%, Orland would face a financial penalty of paying tuition to both Bucksport and the other school for the same student. It is really more of a cost-sharing arrangement than an abridgment of choice, but it certainly puts Orland in the position of strongly discouraging choice.

Orono/Veazie/Glenburn: RSU plan preserves choice for Glenburn and Veazie. Orono does not have school choice.

MSAD 4/MSAD 46/Harmony/Willimantic: Preserves choice for Harmony and Willimantic, SAD 4 and SAD 46 do not have choice.

MSAD 44/Gilead/Upton/Rangeley/Dallas, Lincoln, Magalloway, Rangeley, Sandy River plantations: Protects school choice for those that have it.

Brewer/Dedham/Orrington/MSAD 63/Airline CSD: Preserves school choice for all communities except Brewer, which does not have school choice.

MSAD 23/Hermon: Would end a school choice waiver program in SAD 23. Today, students in that district can get permission from the school board to attend a high school other than Hermon. That option will not be available to SAD 23 students, all of whom will be forced to attend high school in Hermon.

In summary, only the RSU plan for MSAD 23 will put an end to school choice options where they currently exist. Choice is to be preserved in the other RSU/AOS plans, as the law requires, which is good news. An AOS plan involving Acton, which has school choice, is still in development.

As the old saying goes, "the devil is in the details."  And that is certainly true of tax policy and tax administration.  A state could have the best tax policy in the world, but if their rules and regulations are enforced in a heavy-handed way then the state would still be considered unfriendly toward business.  Unfortunately, it is very difficult to compare various tax rules and regulations.

However, the Council on State Taxation (COST) is in the business of making such difficult comparisons.  In their latest report, "The Best and Worst of State Unclaimed Property Laws: Scorecard on State Unclaimed Property Statutes: The Holders' Perspective" they provide "a roadmap for legislators who seek to ensure that their state's unclaimed property laws are fair for owners and holders."

In keeping with Maine's infamous anti-business government culture, Maine scores an abysmal C-.  While not among the worst in the country, it is a far cry from the best as well.