The Budget And The Bungler

State budgets are complex and fluid. That being said, let’s look at some facts. State expenditures include spending on government salaries, infrastructure, education, public pensions, public assistance, corrections, Medicaid and transportation. Revenues come mainly from tax collections, licensing fees, federal aid and return on investments. In fiscal year 2014, 49.7% of total tax revenue came from sales taxes and gross receipts, with income taxes accounting for 41.5% of total tax collections. Maine had the 3rd largest tax collections per capita in comparison to its neighboring states. Federal aid to Maine in 2013 was approximately $2.8 billion or 35% of the state’s general revenue. State spending in FY 2015 was 7.6%, the 3rd largest among New England states. In FY 2015, Education accounted for 20.5% of expenditures while 34.4% went to Medicaid. Between 2010 and 2014, the share of the state budget spent on Medicaid increased from 28.6% to 34.4%.

Gov LePage’s 2016-2017 biennium budget for FY 2016-2017 included $300 million in tax reductions which would primarily lower top individual and corporate income tax rates and adjusted sales taxes. He also proposed increasing taxes on large nonprofits such as hospitals, colleges & private schools. Fortunately his veto was overridden by the legislature. The Governor’s entrenched ideology not to accept Medicaid Expansion has severely undermined the state’s ability to effectively balance the state budget without undermining its citizens.

Medicaid Expansion would provide needed coverage for 64,000 uninsured Mainers, provide jobs across all work sectors and increase the states revenue base. The federal government pays 63% of the current Medicaid program. It would have paid all of the Medicaid costs during 2014-2016 with the federal share decreasing to 95% in 2017, 90% in 2020, and remaining at that level thereafter. Finally, those corporations who come to the state, receive perks and incentives from the state and then abruptly re-locate, leaving workers and taxpayers high and dry, must be required to pay a severe cost for these grotesque levels of greed. The wealthy and powerful should not have a stranglehold on tax cuts/breaks. Businesses owe their lives to the everyday workers and taxpayers.

In the end, Medicaid Expansion is not just about assisting those who are in the most need of health care. It is also about increasing economic activity, supporting a significant number of new jobs, reducing state spending on State-Funded Health Care for the uninsured, reducing uncompensated and charity care for small and rural hospitals, reducing the costs that are passed on to consumers and businesses and increasing state revenue by increasing job opportunities. More jobs obviously means that more people are employed, leading to higher family incomes. Had expansion been implemented in 2014 and 2016, there would have been an additional $288 million in federal Medicaid funds provided to the state. If we want to increase state revenue and effectively balance the budget in the future, we must reverse the course on which we are now traveling.

And another thing. Only 20.5% spending on Education? Don’t get me started!

 

Richard A. Evans, MD, Candidate, Maine House of Representatives (120th District)

 

 

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