Gov. Paul LePage wants the state to sock away more money into its “rainy day fund.” To do that, he’s calling for all additional projected state revenues be set aside, but that’s drawing a cool response from lawmakers in both parties, who say the state has bills to pay.
State revenue forecasters are saying that the state will get an additional $73 million over the remainder of the two-year budget, thanks to higher than expected income tax receipts. The governor is proposing legislation that would place all of that windfall into state reserves.
“That money should go right into the rainy day fund, where it can protect the state from a future economic downturn,” LePage says. “The state’s current balance would only fund state operations for eight and a half days in the case of a catastrophic event.”
The Budget Stabilization Fund, the actual name for the rainy day fund, currently has a balance of $111 million, and under the governor’s plan that would grow to nearly $184 million.
Leaders of both parties say LePage’s measure caught them by surprise. House Republican Leader Ken Fredette says his caucus will likely support increasing the budget reserves.
“Most House Republicans are pretty committed to not being in the position of spending more money,” he says. “Now, that doesn’t mean there are not priorities out there and places where there should be more money spent, but I think as an overall baseline, I think House Republicans would like to see most of that money, if not all, go into the rainy day fund.”
And there are a lot of spending requests before lawmakers that appeal to members of both parties. House Democratic Leader Jeff McCabe says he agrees that some money should go to bolster the rainy day fund, but he says there are important needs that have to be met.
“Whether it is the priorities for veterans, whether it is trying to sort out the National Guard bill around sending National Guard members to colleges around the state of Maine and actually finding a way to pay for that tuition, there are a number of priorities that we have,” he says.
And perhaps the biggest need, says McCabe, is to increase school funding by $23 million to make up for the loss of state aid in many school districts this year.
Senate Democratic Leader Justin Alfond of Portland says school officials in Cumberland County have made it clear that there will be serious cuts at some schools as a result of the reduction in state aid.
“Positions will be cut,” he says. “Programs will be cut, students are going to be affected if we don’t put more money into education.”
But LePage rejects the call for more school funding. He says the districts are already getting enough support from the state aid.
“This $23 million would be a windfall for runaway state education spending, which has already increased by $80 million over the last budget,” he says.
LePage says the state should hold the line on spending, citing the fact that the current two-year budget, which was passed over his veto, increased state spending by $300 million.
Senate President Mike Thibodeau says Senate Republicans discussed the governor’s proposal at their caucus, and will have to weigh it against all of the spending requests that are now before the Legislature.
“There are bills floating around this place to, you know, restore funding, take funding move funding, end funding,” he says. “At the end of the day we will all have a chance to weigh in on that.”
The political reality is that it takes bipartisan support to pass anything in this Legislature, and the governor’s proposal will likely not have the votes needed to pass. But the mere existence of the measure gives his supporters some leverage in negotiations that will occur toward the end of the session.
