During the first half of the 125th Legislature, we passed a strong slate of bills to generate a stronger economy, a better business climate and more job creation.
We did this all while striking a delicate balance concerning business needs and the needs of the elderly, our children, the indigent and the environment. Admittedly, I will say that the Governor’s original budget proposal seemed a bit too vigorous for a new administration holding a narrow majority. Being dealt the task of rolling back a long list of burdensome regulations on businesses, and dealing with a very invasive tax structure made it all seem like a daunting task. Couple that with trying to reformulate our public employee pension system so it remains solvent for future generations, all while knowing we need to get a two-thirds vote for such a budget from both sides of the aisle seemed impossible. However, in the end, after hundreds of calls and e-mails from concerned citizens and endless hours of debate, we did what had to be done, and the art of compromise paid off for all of the citizens of the State of Maine.
The list of bills presented to us ran the gamut from the vitally important to the somewhat ridiculous. Of vital importance were issues dealing with the elderly and the threat of an increase to a Medicare buy-in, cutting the red tape that has kept the hands tied of our small businesses, and how we provide and pay to educate our children. Other pressing issues dealt with the Maine Uniform Building Code, and LURC issues. Those are just a few important items, but we also dealt with some silly issues like the Whoopie Pie bill, which took on a life of its own, a bill to change the Maine State Seal, and a host of many state bills geared toward legislating common sense to the citizens of Maine and the one thing you cannot legislate is common sense. What I want to concentrate on in this article are a few of the more important issues.
Health Insurance Reform
This is a transformational change. Maine’s insurance rates are among the highest in the country. Employers, employees and individuals are stretched to the limit — and beyond. LD 1333, the common sense overhaul that is now law, aims to return us to the American mainstream with more competition, more choices and a more rational rating structure. The goal is to drive down costs and make insurance more affordable for everyone, and it will promote greater access to health care for the 133,000 Mainers who currently do not have health insurance.
For individuals with expensive or chronic conditions, a guaranteed access plan will assure they can buy coverage at reasonable rates, thanks to a new subsidy program. Businesses can band together to obtain better rates. Mainers also will be able to shop for insurance across state lines. These features will be implemented over the next several years to ensure an orderly transition. In a questionnaire sent out earlier this year, the citizens of Presque Isle responded overwhelmingly to be allowed the choice to buy health insurance outside of the Maine. The results were 94 percent in favor.
Pension Reform
The new budget includes changes to the public pension system that will save Maine taxpayers several billion dollars and enhance the system’s long-term stability. The budget makes structural changes to the pension that will reduce the unfunded actuarial liability from $4.1 billion to $2.4 billion. When factored for future inflation, the total estimated UAL payments drop from $9.63 billion to $6.475 billion — an estimated savings of $3.155 billion between now and 2028, when the debt must be retired.
Pension reform is a major advancement toward the state’s fiscal solvency. We were able to do all of this without forcing state employees to take furlough days that have caused inconvenience to all Mainers during those state shutdown days.
Tax Cuts
The budget for 2012-13 delivers the largest tax cut in Maine’s history — $150 million over two years. Legislators dropped approximately 70,000 low-income filers from the income tax rolls; they will pay no income taxes. This tax cut offers middle income families in Maine real financial relief in these tough economic times and provides economic stimulus by keeping cash in the pockets of the people.
The package also eliminates the Alternative Minimum Tax and the tax on meals served at retirement facilities. It fully restores the Business Equipment Tax Reimbursement program, which will encourage businesses to invest in capital equipment. The estate tax exclusion has been increased from $1 million to $2 million effective July 1. All of these changes are permanent.
The people of Presque Isle also spoke loud and clear on this issue. As a result of the questionnaire mailed out earlier this year, 77.3 percent wanted tax relief.
Regulatory Reform
Maine’s huge and aggressive regulatory bureaucracy has been one of the most serious impediments to the success and survival of businesses in this state. Soon after being sworn in, new legislative leaders took up the cause of regulatory reform. Senate President, Kevin Raye and House Speaker, Robert Nutting co-sponsored LD 1, An Act To Ensure Regulatory Fairness and Reform. It marked the beginning of a new attitude in Augusta, one in which regulators will work with businesses instead of against them, while maintaining strong environmental standards. In meetings all over the state, a select committee of legislators met with business owners, workers, community leaders, farmers, fishermen and entrepreneurs who have put their fortunes on the line to make a better life for themselves and their families. Their overall message was clear — collaborate with us instead of standing in our way.
The resulting legislation streamlines government regulation and eliminates “red tape.” It specifically includes changes to the Maine Department of Environmental Protection, the establishment of an environmental self-audit program and the creation of a new business ombudsman program. All revisions contained within the public law will go a long way to encourage business development.
Welfare Reform
The budget makes substantial reforms to Maine’s extensive welfare system. To match with federal standards, it imposes a five-year limit on Temporary Assistance to Needy Families benefits. Hardship exemptions will be allowed based on rules being developed by the Department of Health and Human Services. There will be strict sanctions for people who violate TANF rules that require efforts to find a job. With the first offense, the adult award is terminated; with a second offense, the full family is sanctioned.
Convicted drug felons on TANF will be drug-tested. If they fail, they will have the right to appeal. If they fail again, they will be terminated from the program unless they enroll and fully participate in an approved treatment program. The reform also ends MaineCare (Medicaid) benefits for legal non-citizens. Current recipients will be grandfathered for TANF and food stamps, but no new legal non-citizens can obtain benefits unless they meet strict hardship criteria.
The changes in this budget send the message that personal responsibility and independence are expected of every able-bodied Maine resident. As a result of the aforementioned questionnaire sent out in the district, welfare reform was ranked as the number one issue citizens of Presque Isle were concerned with.
In closing, this past session will be remembered as the first time we passed the largest tax cuts in Maine’s history. We passed that budget with a super majority vote in both the House (123 “yea”, 19 “nay”) and Senate (29 “yea”, 5 “nay”). All of this was accomplished while not going farther into debt by borrowing more money and adding to our state’s already heavy bond load. And to that, we also had, for the first time in almost 20 years, a State Treasurer who orchestrated the sale of $108 million in general obligation bonds. This is money that will be used for highway and railway construction, and to fund other capital projects.
All in all, this was an extremely productive time in our State’s history and I believe that we will all reap the benefits of our work for years to come. Make no mistake; six months of hard work is only the beginning. We still have plenty of hard work ahead to make sure our great state remains solvent, and a desirable place to live, raise a family or retire, and for businesses to come and provide the jobs we all need.
