State spending cut to the bone? Think again

By Stephen Bowen | Sep 25, 2009

News from the Appropriations Committee room at the State House in Augusta, where Maine’s state budget is developed, has not been good. Legislators on the committee have been struggling to find the $30 million in budget savings they were tasked with finding when the allegedly “balanced” budget was passed last spring.

While it was announced a couple of weeks ago that, amazingly, a major state radio network project ended up being $400,000 less expensive than anticipated, that still leaves lawmakers with a $29,600,000 hole in the budget, an amount that does not include the additional budget savings that will likely need to be generated as a result of the ongoing economic downturn.

Committee members have received little help from the state’s varied departments. Brenda Harvey, commissioner of the vast Department of Health and Human Services, told legislators that she couldn’t suggest any further cuts that could be made to her department’s $820 million annual budget. Education commissioner Susan Gendron, whose department spends $1.2 billion a year, couldn’t identify any budget savings from her office either, suggesting instead that Maine’s schools simply close for a few days over the course of the year to save money.

In fact, from the rhetoric heard in Augusta, you would think that state government spending has been cut to the bone.

A new publication from the Maine Heritage Policy Center, where I work, reveals that despite what one hears in the halls of the State House, there is plenty of waste and overspending in state government. The “Piglet Book,” authored in cooperation with the Washington D.C.-based watchdog group Citizens Against Government Waste, details hundreds of millions of dollars in questionable spending by state government.

Maine government, the book notes, spends $18 million a day, meaning it will likely have spent $50,000 by the time you finish reading this column.

Where has all this money been going?

Well, Maine government has already spent $155 million on the Dirigo Health program, which has been such a spectacular failure that there are more uninsured Mainers today than there were when the program was launched in 2003, with the mission of insuring every uninsured Mainer by 2009. The monthly premiums charged for this government-run program, by the way, have increased 74 percent since the Dirigo program was launched.

But Dirigo Health is just the start. The “Piglet Book” also reveals that we not only have too many state employees by national standards, but we pay them too much. According to the report, if “Maine’s state workforce, as a percent of the private sector workforce, was at the national average there would have been 4,497 fewer state workers - 22,985 versus 27,482.” “This over-employment,” the report notes, “cost Maine taxpayers up to $189,451,468 in 2007.” Mainers could save another $245 million if these workers had pay and benefits more in line with national averages as well.

Does the “Piglet Book” say we need to cut state employment and compensation to the lowest levels in the land to achieve these savings? No. Those are the savings generated by simply matching the average for all states.

Maine could generate plenty of other taxpayer savings by simply being average. The state’s Medicaid program is the largest in the country, covering an astonishing 23 percent of Maine’s population. New Hampshire’s Medicaid program, by contrast, covers only 8 percent of that state’s population, yet there are fewer uninsured people in New Hampshire than in Maine!

Average spending growth by state programs would be a welcome change as well. Over the past decade, spending by Maine’s myriad state programs grew by an average of 26 percent. Total spending by the Department of Corrections, though, went up by 83 percent, the highest rate of growth for any state agency. Perhaps the $15 million in overtime benefits that the Department of Corrections paid in 2008 helps to explain the massive growth in spending by that department.

The Legislature itself did little better. Its budget grew by 47 percent over the last 10 years, according to the “Piglet Book,” rising from $33.1 million in 2000-2001 to $48.6 million in 2008-2009. Growth in spending by the governor’s office was even worse, shooting up 83 percent over that same period.

Many legislators got to the Legislature in the first place by using Maine’s taxpayer-funded “clean elections” system, something only one other state in the nation, Arizona, has even tried. Every legislative election, and they take place every two years, costs the program $3 million. Taxpayers funded $6.8 million in the last gubernatorial election, and with at least a dozen serious contenders for governor in 2010 already and more on the way, we can expect spending on this welfare program for politicians to skyrocket.

Much of this state spending isn’t even done in Maine. According to the Piglet Book, between 2006 to 2008, Maine state government spent $1.7 billion in Maine, but spent $976 million in other states, including $151 million in Massachusetts, $129 million in Connecticut and $50 million in, of all places, Texas.

Why are we using Maine tax dollars to create jobs in other states? For that matter, why did Maine government spend $82,000 on bottled water in 2008? Why, that same year, did the state spend $7,540,144 on “Auto Mileage Reimbursements?” How did the state actually spend the $127,007,694 that is listed in state records as being “miscellaneous” spending for 2008?

In 2008 alone, according to the “Piglet Book,” 512 state employees each took home over $10,000 in overtime pay, in addition to their regular pay and benefits which are already above national averages.
State spending “cut to the bone?” Take a look at the “Piglet Book” and think again.

The 2009 “Piglet Book” was released to the public on Thursday, Sept. 24. Please visit MainePolicy.org to see the complete publication.
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