Policy Wonk: Governing by initiative
The Democrats are in a tight spot – in part because they underestimated the resolve of Gov. LePage, and in part because of their own ineptness.
The governor’s resolve. It is foolish to believe the governor will roll back any of the tax cuts put in place during the first two years of his administration. That's not in his DNA. It is foolish to believe he will agree to any tax increases to bridge the revenue gap the state faces. More likely, he will push for further tax cuts; after all, this is a man who has called for ending the income tax. It is foolish to believe he will expand health care coverage; this is a man who thinks fraud is everywhere, and that many of the poor, elderly or handicapped are "lazy."
It is foolish to believe that as the budget deadline draws near, LePage will compromise. No evidence supports this view. He turned down repaying the hospital debt because it was linked to health care expansion; he turned down the "Gang of 11's" income tax cuts because they were offset by more sensible tax increases. What is more likely is a state government shutdown, a game of "chicken" that the Democrats may lose.
Democratic ineptness. Where to begin? They failed to challenge the governor – in court, and in the court of public opinion – on his freezing $100 million in voter-approved bonds. The Dems were mesmerized by the governor’s soft rhetoric in his State of the State address. With a few exceptions, they failed to cultivate relationships, to work closely with centrist Republicans whose votes they need to override gubernatorial vetoes. They failed to see that paying the hospital debt, getting two-for-one federal matching dollars, was a winning strategy for the governor, and a $500-million shot in the arm for Maine’s economy.
Baldacci had eight years to solve the hospital debt problem, and didn’t. Most of the public see repayment as a matter of fairness. The Dems have stalled and stewed, linked hospital debt repayment to the expansion of health care coverage, and six months later we have neither. The governor is killing them on this issue.
The Dems also failed to capitalize on the most controversial part of the governor’s budget: killing revenue sharing. That means everyone’s property taxes will rise sharply. Where’s the statewide coalition of opposition? Why wasn’t there a focused tax bill to save revenue sharing? Even if vetoed, such legislation stood a good chance of an override, because revenue sharing enjoys wide bipartisan support.
Instead, the Dems on the Taxation Committee got mired down in tax trivia and complexity – a tax effort equalization bill, a fuel tax bill that kept up with inflation and equalized the burden on different fuels by looking at BTU outputs, and the late-arriving and ultra-complex "Gang of 11" tax proposal. Whatever the virtue of these LDs, they were going nowhere in a LePage administration. In short, the Dems failed to keep it simple, and failed to focus on the big issue.
What’s next. First, the Dems need to immediately pass the hospital repayment bill. Get it behind you, it has no leverage value. The state owes the money. Holding this bill hostage lets the governor continue beating you over the head, and destroys your credibility with a large segment of the public. Moreover, the infusion of $500 million into Maine's economy is a large plus.
And learn from the recent past. The only setback LePage suffered during the first two years of his administration was the public's rejection of "voter suppression" legislation he and a Republican Legislature put in place. In a matter of weeks, a coalition of angry organizations gathered the signatures needed to put this ill-considered legislation on a statewide ballot, and voter suppression was overwhelmingly repealed.
Now, instead of repealing bad law, the Dems need to take the lead in mounting a similar coalition of angry people/organizations to gather the signatures needed to initiate two pieces of positive legislation. First, put a version of LD 1066 before the voters, expanding health care coverage to more than 60,000 low-income residents – an expansion almost fully paid for by the federal government (100 percent for the first three years, 90 percent thereafter). Include a provision that allows the state to pull out if the feds fail to meet their funding commitment.
Second, fashion a bill that raises the sales tax by 1 percent; raises and maintains Maine’s meal, accommodation and rental car tax rates at the average level of the five other New England states we compete with for tourist dollars; and earmarks these revenue increases to preserve statewide revenue sharing. Let the people decide whether they prefer a sharp increase in property taxes, or these tax alternatives – a large portion of which would be borne by non-resident visitors.
If these two initiatives are put to the voters and fail to pass, then the governor has carried the day. But if the initiatives pass, Dems might then consider two others: one to enact the bipartisan jobs bill that would help our economy, and one to enact the bipartisan energy bill the state sorely needs.
In sum, if Gov. LePage can’t or won’t compromise, the Democrats must attempt to govern – by using The Initiative.