All the Rage with Paul LePage: LePage Warns of Budget Catastrophe Despite Surplus
Thursday, January 05, 2017 11:50 AM
Gov. Paul LePage has been all over the airwaves during the past week preaching impending doom for the economy following news that Maine’s tax revenues were slightly down for November. Speaking on WGAN radio on December 29, the governor advised the public to be prepared for deep spending cuts, which he says are necessary to save the economy from disaster.
“We’re doing final spending cuts today and we’re also meeting today to see what the tax structure is gonna look like,” said the governor. “We met yesterday and what people don’t understand is in the month of November and December the revenues went to a complete screech. I mean they’re way under budget for the first time in a couple of years.”
LePage speculated that the revenue shortfalls may be due to the “federal election” or because voters approved an increase in the minimum wage and to increase taxes on the top 2 percent of income earners. He blamed his own economic forecasting committee for not considering the impact of the two referendums on state revenues.
“I will say this, there will be some spending cuts,” the governor added. “We’re going to shrink government best I can. Revenues, they’re not there.”
However, his own budget team has reached a different conclusion for the revenue shortfall. Last month, MPBN News reported that a memo from State Finance Commissioner Richard Rosen to the governor’s office stated that state revenues failed to meet November revenue projections because his office made a timing error in its revenue projections from late income tax filers. He also noted that the state still has an overall revenue surplus of $49 million for the current fiscal year.
“Year to date, major revenue lines are all running at or above what we projected,” Rosen told MBPN. “So we are up 3.5 percent year to date overall, and I think that is important to reinforce. The individual income tax line was the primary reason that the November report shows a negative for the month.”
It’s unknown how the governor was able to talk about revenue numbers for December because he made the comments before the month was even over.
Revenue hysteria aside, the governor has been planning to cut the budget and deliver more tax cuts to the wealthy since long before the presidential election or the referendums passed. In a memo leaked to the press in July, the governor’s deputy chief of staff Kathleen Newman stated that the LePage’s three main goals in the budget were to decrease the top marginal tax rate to 5.75 percent, reduce spending to below 2016-17 levels and to cut 2,300 state jobs.
“I told everybody that I was going to propose a flat-funded budget from 2016 to 2017,” LePage continued on WGAN last week. “It was like talking to a wall.”
In reality, the governor actually originally proposed a $166 million spending increase in his last budget.
LePage Doesn’t Understand Minimum Wage Law
Meanwhile, LePage has come up with a new justification for not enforcing the subminimum wage increase for tipped employees from $3.75 to $5 per hour this month: his administration doesn’t understand the law.
“This is what happened,” LePage told WGAN. “I asked the head of the Department of Labor to come over and tell me what they’re going to do, and they didn’t understand the law. And I said, ‘How can you force, I mean you don’t understand, so go understand it and then come back and see me and we’ll see what we’ll do.’ Until they understand what the hell this law is all about, how can you enforce it?”
The governor went on to blast newspapers for reporting on his decision not to enforce the law. “It used to be in this country that you needed the press to have oversight over government and now it’s government has to have oversight over newspapers, and I just don’t have the resources to keep track of ’em.”
In response to the governor’s comments, Mainers for Fair Wages spokesman Mike Tipping said that LePage “seems to be the only person in Maine who doesn’t understand what raising the minimum wage means.”
“If you work a job as a restaurant server, you should be receiving a $5 base wage plus your full tips as of January 7th,” said Tipping. “Anyone who says otherwise is lying.”