The state of Maine is offering the rest of the nation proof that conservative economic policies not only work better in the short term by stimulating the economy, but are beneficial for the long term as well ensuring long–term economic success.
A new article in the Bangor Daily News examines the exciting economic successes of the controversial Republican Governor Paul LePage. Maine’s economic outlook is so bright that many other states in the nation are watching to see how they might incorporate some of the states policies in their own plans. The Daily News notes that Maine has an all-time record amount of “cash on hand,” more than $1 Billion, and that this is mostly due to Governor LePage’s fiscal discipline and economic decision making.
But why would the state being in the black and having more than $1 Billion on hand matter? The Daily News spoke to the State Treasurer, an Independent who explained that keeping that money together helps the state maximize the interest it is earning while also making sure that the state can pay for its commitments even when the economy dips. But there’s more; being flush with cash allows also increases the state’s credit rating and means that when the state does need to borrow money, it costs the taxpayers less.
Basically, LePage’s financial planning comes with no negatives… other than the complaints of Democrats.
Former state Democratic Rep. Peggy Rotundo complained about LePage’s initiatives. “All of these cuts are unnecessary from the perspective of needing to balance the budget. It’s important to be fiscally responsible, but look at the how the number of hungry people in this state has gone up since this governor took office. The number of people in poverty has risen. I would argue that there is a way to be fiscally responsible and balance your budget without doing it on the backs of vulnerable people.”
Here’s the problem with Rotundo’s complaints; because of LePage’s decisions, the economy in Maine has improved far faster than in most other states in the nation. No one in this report disputes this fact, whether on the right, left or in the middle. If the economy is improving in general, then it necessarily means that life for the poorest of Maine’s citizens will also be improving. This is the basic economic truth that Democrats always seem to forget, “a rising tide lifts all boats.” LePage’s reforms may mean less money for the welfare state in the short term, but they will also mean more benefit for everyone (including the poor) in the long term.
As the Daily News reports, LePage and his conservative economic policies deserve most of the credit for Maine’s bright economic outlook, but that won’t stop Maine’s Democrats from trying to undue all of the good work LePage has done.
The state’s financial controller, Douglas Cotnoir, explained that “firming up the state’s financial position is good for the state’s credit rating, which saves the state significantly on borrowing when it improves, but also changes the dynamic when it comes to governing.
“Maine has recognized its economic reality and has built its revenue forecasts and its budget in relation to that economic reality,” he said. “By doing that, it allows the state — both the executive and legislative branch — to step away from trying to fill budget holes as a priority and focus the attention on the strategic initiatives that will address the economic reality.”
Even so, Democrats are looking for ways to overturn LePage’s economic successes and return their state to the slow growth, economic malaise of previous Democrat administrations.
None of this is likely to quell political battles this year, as LePage calls for more cuts to balance his proposed tax cuts — even in a fiscal year that is expected to end with a multimillion-dollar revenue surplus. While LePage and Republicans argue that cutting spending and taxes is good for Maine’s long-term economic viability, Democrats and advocates for low-income Mainers will stand firm in their conviction that investing in programs that pull people out of poverty and support other social services is the best way to spend precious taxpayer money.
The voters in Maine have an important decision to make. They must either support LePage and enjoy a growing economy and a brighter economic future, or throw in with the Democrats and embrace economic stagnation and dismal prospects for their future.