The budget may be passed, but there is much work left to do in this legislative session.
This year’s state budget process was the most difficult in recent memory. A shortage of money and many legitimate and heartfelt demands on state government challenged us to cut programs and cut the size of government, and to do it in the least painful way possible. It is a budget than none of us love, but one which we can live with for now.
As important as the budget is to our state, Mainers are demanding that this Legislature take action on three pressing issues this year: tax reform, health care and economic development. Each is a complex issue demanding complicated and sometimes politically challenging solutions.
Tax reform
The message from Maine citizens on tax reform could not be louder or clearer: the burden of taxes, specifically property taxes, is becoming unbearable.
Tax reform means reducing the overall tax burden on those who can least afford it – that means not just low-income but also middle-income families and small businesses.
Our tax system is antiquated. We have a 21st century economy with a 19th century tax code. Our tax system is based on goods and not services, even though our economy is now focused on services and not goods.
Approximately one-third of the state’s sales tax revenue comes from three sectors – automobiles, building materials and durable goods – making state revenues highly susceptible to fluctuations in the economy. Legislators have offered a number of proposals to change our tax structure, from broadening and lowering the sales tax, to taxing services, to a gross receipts tax. Serious consideration is also being directed to tax “exportability,” or finding ways to move more of the tax burden to people who live outside of Maine but vacation here or own second homes here.
Health care
Gov. Baldacci has already begun serious work on the issue of health care by creating a Health Action Team to find a way to ensure that every Mainer is covered by affordable, accessible and sustainable health insurance.
The Legislature has been a strong ally by tackling the problem of escalating prescription drug costs. We have offered numerous bills to attack the crisis head-on.
For example, one would lower the cost of prescription drugs by forcing drug companies to reveal how much they spend on marketing and advertising; another would empower insurance plans and employers to negotiate more affordable prices for their patients.
This is a tough issue with no quick fix. It took us years to get to this point and it will take diligence and ingenuity to find solutions. Maine has proven itself in the past three years to be a national leader by creating Maine Rx, an affordable drug program. We must be doing something right because the pharmaceutical industry has fought Maine every step of the way on this and other efforts to provide affordable drugs to our citizens.
Economic development
The governor has taken a strong and early lead on the economy with the his economic development package. I am proud to be the primary sponsor of the governor’s economic development bond proposal in the Legislature. This is a high-leverage opportunity for the state, where every dollar invested is expected to bring in at least $2 more in outside funding.
But even that is only the beginning of the return on investment. Consider that a $7 million investment in Maine’s Biomedical Research Fund in 2002 resulted in the creation of 173 well-paying jobs at Jackson Labs, supported more than 300 construction jobs, and generated millions of dollars in sales and income taxes.
The economic bond also includes funds for municipal infrastructure grants; the University of Maine System to support research and development efforts that directly benefit the Maine economy; to support the state’s nonprofit marine laboratories to support world class marine research; and affordable housing for working people. Each of these investments will generate millions of dollars in matching funds and a host of ripple benefits in terms of job creation and revenue generation for the state.
The budget we just passed is a crucial road map for the coming two years, and could not have been passed without the spirit of bipartisanship that was so keenly promoted by the governor and supported in the House and Senate.
Maine citizens have demanded we do much additional work in the coming months. We look forward to tackling these with the same energy and cooperation to produce real results.
Rep. John Richardson is the House Majority Leader and represents District 49 in Brunswick.
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