Advocates say Maine’s surplus should be used to stem the tide of ‘supercharged inequality’ / by Dan Neumann

In a potential preview of budget negotiations between Maine Democrats and Republicans during this legislative session, GOP Rep. Jeffrey Hanley introduced a bill on Wednesday to give much of this year’s projected $822 million budget surplus to Maine residents through a one-time check.

But progressives say the surplus should be invested in expanding health care, affordable housing, childcare, paid leave, and rebuilding a safety net left tattered by tax giveaways for the wealthy under former Gov. Paul LePage.

“COVID-19 has supercharged inequality and concentrated wealth. The revenue created by staggering increases in profits for those at the top is significant,” said Sarah Austin, director of policy and research for the Maine Center for Economic Policy. “We now have a choice — cut checks to everyone, including those whose income has skyrocketed during the pandemic, or choose to get our economy back on track by making investments in removing barriers to success facing workers, families, and small businesses across the state.”

Hanley’s bill, LD 327, would distribute 75% of the revenue surplus to Maine taxpayers, after the state’s obligations to bond debt, salaries and contract payments are fully paid. The remaining 25% would transfer to the Budget Stabilization Fund, also known as the Rainy Day Fund.

“The important thing is to get this money out of the reach of state government,” said the Republican representing Pittston.

As in each of her previous budgets, Democratic Gov. Janet Mills has signaled a desire to try to get Republican support for her next budget, this time by redistributing a portion of the surplus to taxpayers. 

The $822 million surplus for the two-year budget cycle ending in mid-2023 comes partially as a result of a one-time influx of federal COVID relief dollars that were earmarked for states by Congress last year in the American Rescue Plan Act.

Progressive groups testified against Hanley’s bill on Wednesday during a public hearing by the legislature’s Appropriations and Financial Affairs (AFA) Committee.

They argued that a one-off payout would be a missed opportunity to finally fund critical needs, some of which never recovered from the Great Recession of 2008 and the era of state budget austerity that followed. 

“Our state government was already pushed to the limit before COVID. That was the direct result of policies like LD 327,” said Adam Zuckerman, a lobbyist for the Maine People’s Alliance, of which Beacon is a project. “Gov. LePage and his allies spent eight years deliberately slashing essential public programs to give tax breaks to the wealthy. They decimated the very programs that would have allowed us to respond to the crisis. We have not come close to recovering from that deliberate disinvestment, let alone from COVID.”

Zuckerman continued, “Our state is in the midst of an unprecedented economic and public health crisis that has revealed how fragile and grossly underfunded our state’s social safety net is. Never before has the need to invest in universal affordable child care been more clear. Never before have we seen so many Mainers struggle to afford housing. Never before have we recognized the critical role that our direct care workers and other essential workers play. Never before have we truly appreciated how denying health care to any of us, documented or undocumented, threatens us all. Never before have we so viscerally understood the life-and-death need to invest in recovery for Mainers struggling with substance use disorder.”

Austin said such investments during this potentially limited window where Democrats hold majorities in the Maine Legislature would help stem the tide of growing inequality in Maine.

“When we pool our resources through our tax code, we can solve problems that stand in the way of our shared prosperity,” she told members of the AFA committee. “Blanket giveaways of revenues as proposed in this bill dismiss the unequal footing Maine families and businesses have in the economy and fail to address the specific problems that hold some people and communities back from success.”

She added, “It’s important for lawmakers to meet the immediate needs of people struggling with higher costs for fuel, food and essentials, while also investing in improvements to child care, elder care, paid time off and education which are necessary to empower Maine’s workforce. The choice is ours to fund a better future for all Maine people.”

Photo: Maine State House | Beacon

Author: Dan Neumann studied journalism at Colorado State University before beginning his career as a community newspaper reporter in Denver. He reported on the Global North’s interventions in Africa, including documentaries on climate change, international asylum policy and U.S. militarization on the continent before returning to his home state of Illinois to teach community journalism on Chicago’s West Side. He now lives in Portland. Dan can be reached at dan(at)mainebeacon.com.

Source: Maine Beacon, January 12, 2022, https://mainebeacon.com/advocates-say-maines-surplus-should-be-used-to-stem-the-tide-of-supercharged-inequality/