October 2009 Archives

So who exactly is "Citizens Who Support Maine's Public Schools?"

That was the question that led me to spend some time looking at Political Action Committee filings at the Maine Ethics Commission's website.

All I knew about CWSMPS, as I will call it, was they have raised and spent a massive sum of money - $650,000 - to defeat Question 4, the Taxpayer Bill of Rights.

So who are they, and where did this money come from?

It turns out that CWSMPS has been around for some time and is essentially a pass-through organization for contributions from the National Education Association (NEA). It is run out of the Maine Education Association (MEA) headquarters in Augusta.

The earliest documents available on the Ethics Commission website suggest that CWSMPS was first launched, with a hefty $300,000 contribution from the NEA, to support the 2004 initiative from the Maine Municipal Association (MMA) requiring the state to pay 55% of the total cost of public education.

The next target for CWSMPS was the 2006 TABOR initiative. Between the beginning of June, 2006 and the October 27th of that year, the NEA alone pumped well over $500,000 into the campaign against TABOR, with CWSMPS serving as the pass-through entity. Though most of that money went directly to the organization managing the campaign against TABOR, CWSMPS did quite a bit of campaign work itself, hiring consultants and producing campaign ads and materials.

CWSMPS started off 2009 with about $400 in the bank, but plenty more was on the way. In March, the MMA contributed $10,000 to CWSMPS. The MEA itself followed up with a $40,000 contribution in June. On July 10th, a $350,000 check arrived from the NEA, the bulk of which was forwarded on to Citizens Unified for Maine's Future (CUMF), the primary PAC opposing Question 4. 

$250,000 more showed up from the NEA on October 6th, and was promptly forwarded on to CUMF days later.

So the "citizens" in "Citizens Who Support Maine's Public Schools," this year at least, are really not citizens at all, but three powerful tax-and-spend special interests - the NEA, and MEA, and the MMA. Together, they have contributed all of the $650,000 that CWSMPS has raised and spent opposing Question 4.

That $650,000 makes up the lion's share of the $1.7 million that CUMF has raised to fight Question 4, making the NEA by far the largest single contributor to the campaign against TABOR II.

Citizens Who Support Maine's Public Schools? Citizens Unified for Maine's Future?

"Out-of-State Tax and Spend Special Interests" who do these things might be more accurate.

 

 

In my previous blog, I noted that in 2008 Maine's private sector share of personal income set a new all-time record low.  Unfortunately, it appears that the 2008 record will soon be shattered in 2009.

In the 2nd quarter of 2009, Maine's private share of personal income plummeted to 62.9 percent--down from 64.4 percent in the 1st quarter of 2009 (click "continue reading" to view chart).

However, it's not just Maine's private sector that has been shrinking but the whole country's.  Of course, that points to the culprit--the Bush and Obama federal stimulus packages.  The stimulus can be seen in its effect on personal current transfer receipts which has grown tremendously--$9.998 billion in the 4th quarter of 2008 to $10.398 in the 1st quarter of 2009 and to $11.127 in the 2nd quarter of 2009.

Whatever the merits of the stimulus package, they must be counter-balanced by the severe crowding-out of the private sector.  Hopefully, this crowding-out is temporary but that hinges on whether or not states decide to pick-up where the stimulus leaves off.  This data strongly suggests that the best course of action is to let the stimulus lapse and let the private sector rebound.

Unfortunately, the track-record for Maine politicians suggests that they will try to make many aspects of the federal stimulus package permanent to the detriment of Maine's private sector.  Therefore, it is all the more important for Maine to have a Taxpayer Bill of Rights in place to prevent the further erosion of Maine's private sector post-stimulus.

Last Friday the U.S. Department of Commerce's Bureau of Economic Analysis released their latest comprehensive revision of data back to 1969 as well as released the latest 2nd Quarter 2009 estimates (see next blog).  Unfortunately, the new data brings a ton of bad news for Maine's economy.

The revised 2008 annual data shows that Maine's private sector share of personal income set a new all-time record low of 66.5 percent (click "continue reading" to view chart).  The previous low point was set in 1975 at 66.6 percent.

Looking more deeply into the data reveals that it was personal current transfer receipts (PCTR) that was most responsible for this dramatic decline in the private sector.  In 2008, PCTR grew by an astounding $1.031 billion--or 11.8 percent.  In absolute dollars this is a new record which was set only a few years earlier at $653 million in 2005.

The growth in PCTR was driven by Medicaid which accounted for 57 percent of the growth ($591 million).  This too was a new record in absolute dollars with the previous record set in 2005 with an increase of $411 million.

With this better understanding of the state of Maine's economy, it is no wonder that the state government just got word that the two-year budget deficit just grew by another $200 million.  Government has been crowding-out the private sector for so long that the private sector's ability to pay taxes is waning at an alarming rate.

This new data should seriously worry Mainers as there is a significant correlation between the size of the private sector and overall economic well-being.  This also shows why Maine needs a Taxpayer Bill of Rights in order to slow this runaway government spending.