Government shouldn't ignore tough financial choices
Good Maine people at good Maine companies are losing their jobs.
Managers are lowering their sales and revenue forecasts, and keep pushing back that future date everyone is looking for – the date defined as "when things get better," or "when this turns around." These business leaders are closing locations, cutting benefits, reducing hours and laying off staff because the survival of their companies is in question.
The recession has passed the point where the people getting laid off are the newest hires or the marginal performers. Many hardworking employees who have a folder of great performance reviews and who earned promotions and raises and bonus checks a year or two ago are being cut now. It is a recession.
Those people who are fortunate enough to find another job are more than likely making less money. Maybe their new work is a couple of part-time jobs with no benefits, or a lower-level position that pays less than they were making, but it was the best they could get, and they're glad to be employed in this recession.
At many Maine companies, people keeping their jobs are not getting raises. Hourly workers are not seeing much overtime, and might be working less than full-time shifts now. Their managers could be facing salary reductions and everyone has been asked to pay more for their share of health insurance premiums.
As families and as individuals, Mainers are showing their strength and creativity by doing the best they can. Most people cut back on the "luxuries" first, which are usually pretty obvious, yet there are many other spending decisions that are different in a recession. Things get tight – no doubt about it.
But why doesn't this seem to apply to town governments?
There have been many recent news stories about a November ballot initiative to reduce Maine's automobile excise tax, and the local officials simply refuse to accept the idea of any cuts in revenues. The first reaction is to name a vital service, like fire, police and ambulance, that would face the "chopping block" if excise tax revenues decrease in a couple of years. The next threatened service usually involves schools or libraries or something else "for the children."
After making a few sky-is-falling arguments, most of the town leaders only offer two choices:
A) Don't cut the automobile excise tax.
B) We will just have to raise the property tax.
And that's about as far as their reasoning seems to go.
Why no "C"? These town leaders don't include options for the kinds of choices that non-government managers and workers are facing in their business and personal lives. Where is the option that includes freezing salaries? What about reducing overtime? Could they have their employees contribute to their health insurance premiums? What about laying off some workers? What about laying off good, long-term, productive workers? In a recession, the decisions get very difficult, and sometimes you don't have any options you like. But as managers, you still have to choose.
Two years ago, people running Maine companies thought things might not grow as quickly, or could even slow down a bit (this was well before oil prices skyrocketed). Then during the last 12 months, sales and revenues in Maine dropped; and dropped again; and then again. Is it the bottom? Nobody knows, but smart managers are making plans for both directions.
There are Maine families making 25 percent or 35 percent or 50 percent less than they were a year ago, and they are getting by. It's not easy or fun, but they are getting by.
Why then, with more than a year's notice, are town officials already rebelling at the notion that "their" revenues might not grow as quickly as they had planned, or might even be lower? Why are they unable to come up with anything beyond the same tired threats to shutter the firehouse and turn off the heat in the elementary schools? Why are their only alternatives to attack lower automobile excise taxes and threaten more property tax increases?
Why no "C"?
Martin Sheehan is the director of communications at The Maine Heritage Policy Center in Portland.