It seemed like an irreconcilable conflict between the two parties, but they resolved it last week in a bipartisan way.
The showdown over time-sensitive tax conformity legislation, vitally important to small business owners across the state, had stretched on for weeks this winter. Democrats had been opposing the legislation, holding it hostage to their demand for increased education funding — even though the two issues are not directly related and tax filing time was rapidly approaching. In the compromise agreed to by both parties in the Legislature and by Gov. Paul LePage, education funding will be increased by $15 million, and the tax conformity legislation passed.
As with all compromises, neither side was left totally satisfied. The Democrats didn’t get quite as much increased education funding as they wanted, leading a few extremists in the House to vote against the deal. LePage and Republicans weren’t happy to increase government spending, of course, but education is at least a somewhat palatable area in which to do it. While it was vitally important to get the tax legislation passed, the deal also showed the state — and legislators themselves — that compromise was still possible in Augusta.
Democrats, after all, had started the session by establishing themselves as the Party of No. Rather than address the important issues facing the state, they staged a show debate over impeaching LePage, despite knowing they didn’t have anywhere near the votes to pass it. The governor responded by canceling the State of the State speech, choosing to send a letter to legislators instead. When the Democrats started the fight over the usually uncontroversial tax conformity bill, it seemed to indicate that compromise over anything this session was going to be impossible.
However, this deal lends one hope that perhaps much of the fighting has been more for show in a campaign season, and that compromise on substantive issues might still be possible. That’s important, because the Legislature still has big issues on its agenda. One of the largest is what to do with the state budget surplus. The mere fact that the state even has a surplus is a victory for LePage, of course, whose fiscal responsibility since taking office has put the state in this enviable position.
LePage has proposed sending much of the budget surplus back into the state’s rainy day fund, which makes sense. If one has been living paycheck to paycheck, struggling to make ends meet, and you suddenly get a raise, it’s best not to go out and spend the money right away. Instead, the wise thing to do would be to pay off debts and add to your savings. Since Maine is required to balance its budget, the state can’t pay off debts, but it can add to its savings.
Democrats, of course, would rather spend the money. They did already with the increased education spending, but they’d like to see even more of it funneled into their favored programs. Now, it’s understandable that after years of lurching from budget crisis to budget crisis, legislators are eager to do a little spending for a change. However, it’s not the responsible approach.
Just as LePage did not propose returning the entire surplus to Mainers in the form of tax cuts, Democrats should not expect to spend all of it right away. The rainy day fund is not only a critically important tool during economic downturns, it’s one of the primary indicators used to determine Maine’s bond ratings. Hopefully, just as Democrats and LePage were willing to compromise on tax conformity, they can forge a deal on the surplus and avoid another pointless political battle that imperils our state’s fiscal health.