Today, Maine Republicans went on the offensive against Eliot Cutler, attempting to paint him as a tax raising pseudo-Democrat. Christie-Lee McNally, the executive director of the Maine Republican Party, today penned an op-ed in the Bangor Daily News, attacking a previous op-ed penned by Ed Karass and linking prior statements of his to Cutler, and his philosophy of governance:
Last August, in an interview with the Kennebec Journal, Karass made the assertion that the next governor would be unable to lower taxes. Karass made the case for a “right-sized government,” and had this to say about taxes: “We may find ourselves in a position where taxes have to be increased but no new programs are brought on board. We may have to increase taxes just to pay for what we currently have.”
On Aug. 31 of last year, Cutler wrote a post on his campaign blog that celebrated Karass’ perspective. Cutler wrote that “Ed Karass is right, and we need to listen,” and declared him a “hero.”
A hero? Mainers have suffered for too long under an oppressive tax structure to find “heroes” in people so oblivious to the problem. Karass’ 28 years in Augusta, and Cutler’s 30 years in Washington and China, have resulted in a startling numbness to the pain this economy is causing the working people of this state.
Unfortunately, this numbness is common in Augusta. Too many in our state government see their goal as self-perpetuation, and the plight of Mainers outside the bureaucratic bubble is a secondary concern. As Karass puts it, “Those of us who have been here for some time, who have been career-oriented in state government, have always taken a longer view.”
This “longer view” means tax relief can come later. After the special interests get their funding, after the bloated bureaucracies are preserved, after career creatures of Augusta like Karass reach retirement, then maybe we can discuss tax relief.
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Career Augusta bureaucrats will never provide the solutions we need to get out of this mess, and Eliot Cutler should look elsewhere for inspiration. Perhaps he would be better served to find his heroes in the working people of this state, who carry the burden he plans to add to.
The op-ed was accompanied by a press release which hit Cutler and Karass over the same quote.
This is a fairly standard line of attack – one we don’t plan on covering much of in the future.
However, this represents the first time the sleepy Maine Republican Party has ramped up its engagement and actually gone on offense in this election. Obviously after a bad week or so of press for their nominee, the GOP is looking to throw a counter-punch and paint Cutler as a career politician who is fine considering tax increases.
And it certainly is interesting that the GOP would choose to empty their first round on Cutler, and not Libby Mitchell. As her campaign continues to go completely un-noticed in the press, this may reinforce my previous guess that the Maine Republican Party considers Cutler the real threat to take down Paul LePage, not Mitchell.
As for the substance of the argument used in this attack, obviously it is quite a bit more complicated of a conversation than what they made it out to be.
The interview with Karass that McNally and the Maine GOP picked apart can be found here. The “right sized government” line came amidst an answer to this question:
Q: You gave some advice to the Appropriations Committee recently. What was it?
A: They really need to put on their surgical masks and gloves. Rather than continue to try to rely on consolidation of operations, the merging of operations, which may save a marginal amount of money in the short term, they really needed to determine what government should look like over the next several years.
They need to balance the needs of those people who cannot help themselves, which is very important for any government, along with the needs of the state of Maine in general.
It’s very important that the state of Maine right-size its government going into the future and make it affordable.
Interestingly, it seems to sound to me that Karass is arguing that lawmakers need to take a holistic, complete look at the structure of what the state does and pays for, and reform it so that it is sustainable. In other words, they can not simply rely on making the bureaucracy more efficient by merging some jobs here and there, and realigning some departments to save money when they need to save money. Rather, they need to reform the entire operation of state government so it isn’t overwhelmed with things like demographic shifts and the like. I think I agree with the basic argument he makes here.
The “longer view” comment came in response to this question:
Q: Is there a way to flatten out the state budget so we don’t see these spikes and dips and then everything is OK until the next crisis?
A: Those of us who have been here for some time, who have been career-oriented in state government, have always taken a longer view.
Term limits have been really devastating to that long view of the Legislature. When I first came in to audit and then transitioned over to the executive branch, term limits were not in place. You had legislators who had, for better or for worse, been here a number of years. All of them seemed to have a longer-term view of where we were going and had more ownership of programs and services they were interested in.
Now, I think what you see to some degree is people come in for a short time, they have their agendas, and their agendas take precedence over the longer-term goals and objectives.
Again, I find his point (mostly) correct at its core. Term-limits (something I do not support) create a legislative infrastructure of people who do not have institutional memory, and are not necessarily around long enough to see the eventualities of their programs or policy ideas. As a result, you constantly have a revolving door of people who want to “do things”, and those things that they want to do may blow a hole in the budget or otherwise lampoon the structural stability of the Maine budget, and then these people are out of government before the effects are really felt. This has given rise to a lot of unconnected, mish-mashed ideas and policies that have no kind of structural sanity to them, and no one around understands the linkage or the long view.
However, I don’t have the reverence for career politicians and professional bureaucrats that he has. He seems to believe that those who have a “long view” do less damage and have more perspective in state government. While this is probably true in some respects, the other side effect is entrenched, lazy and often times corrupt individuals running the show, which can have just as much of a negative effect as short term, revolving door legislators. To me, the best system would include a few influential and respected long term legislators who could steer priorities, supported by a large number of younger, energetic, enthusiastic and responsible short term lawmakers.
But that’s a debate for another time.
The infamous “tax raising” line came in response to this question:
Q: We’ll be choosing a new governor next year. What qualities would you like to see in a new leader?
A: I think the next governor really has his or her work cut out for him or her.
I would like to see a governor that, and a Legislature, more than balance the budget. They need to address the liabilities that are building up in the retirement system, retiree health. We need to look at replenishing our cash and come up with a plan to repair the state’s general fund balance sheet.
But in all reality, the governor coming in will not be able to cut taxes, will not be able to expand programs and will have to concentrate on putting the state’s fiscal house back in order.
We may find ourselves in a position where taxes have to be increased but no new programs are brought on board. We may have to increase taxes just to pay for what we currently have.
This is not something we will grow our way out of.
The quote was not meant in the same way the Maine GOP used it, but he is still wrong, none the less.
His argument here is essentially that if left alone – and indeed, even if some changes are made – the natural inertia of the state’s liabilities will demand that taxes go up to simply pay for the current batch of expenditures the state is obliged to pay. Pressure is being put on the state from all corners – low birth rate, low immigration, low population growth, aging population, poorer people and fewer jobs creating a demand for more state services. The state will not “grow its way out of this” – in other words, an economic recovery won’t suddenly fix what is broken.
And here he is right. The state’s structural organization is such a mess, that even if we returned to the boom years, that wouldn’t ultimately fix anything. Indeed, the stimulus aid to the state has already allowed Maine to put off making those hard, structural reforms, so quite frankly the prospect of an economic boom bailing out the state – even if it were true – sounds like a nightmare to me, because it will yet again put off hard reforms.
However, the idea that taxes need to be raised to maintain the status quo is exactly the kind of thing that has gone on for years in Maine. The more taxes rise, the more you discourage private investment, and the harder it is to attract capital to the state. Maine has been decimated in its traditional industries, mostly due to free trade causing foreign investment due to cheap labor, and to truly reform the state, we need a rebirth of private capital investment into Maine. We need to attract wealth, not punish it. Building a base of jobs, income, employment, and new tax rolls is the only way to truly reverse the tide.
That will attract new people to the state, who will be younger, will have families, will build their own base of capital, and will invest it in Maine themselves.
Relying on the same old raising taxes to pay for services model means basically that you are squeezing producers and making it less attractive for them to come here and invest. In so doing, you are making your problem worse as the tax rolls continue to drop, no one invests, and the transition from private to public continues, placing a greater burden on the state. It is like watching a campfire slowly go out.
The almost singular focus of the next governor needs to be reform. Let me say it again, reform. The burdens of state liabilities needs to be broken. What is really called for in the state of Maine is a complete and total change in thought about what government does, and a wholesale restructuring of everything from entitlements to government benefits, to pensions. In a word, everything. Benefits need to be targeted, not broad. Incentives need to be geared toward work. The regulatory environment needs to be simplified and streamlined to make it as easy as possible to do business in the state.
Then, when the outlays have been brought under control by reforming government, we can begin to talk about lowering and simplifying taxes, to further provide incentives that will attract growth to the state, and begin to arrest the slide.
The knee-jerk reaction of uncreative lawmakers has always been to respond to a problem in the simplest possible terms. Expenditures are rising, so naturally we need more revenue and need to raise taxes, they say. The problem has always been that this simple, low hanging fruit answer to the problem exacerbates the problem, and sets you up to have to make similar decisions again in the future.
Only by directly confronting the black, spiraling disaster that is the state’s mix of a weak economic base, misaligned age demographics and a lack of capital infrastructure or investment by the private sector can we truly “fix the state” and “bring our fiscal house in order”. Simply cutting taxes is a disastrous idea, unless it is preceded by the necessary reforms I outline above. Raising taxes as a zombie like reaction to the problem is an even worse idea.
This state needs change. It needs reform. It needs vision. It needs a no-nonsense, no b.s. governor who is consumed by these priorities and ideas, like Indiana’s Mitch Daniels.
In this respect, I agree with the Maine GOP’s attack on Karass, and by extension the gubernatorial candidate who endorsed his outlook, Eliot Cutler.
It isn’t a matter of making government more efficient, or cutting budgets as part of an accounting game. It is a matter of realigning the state’s functional government so that it encourages growth, capital investment, net population growth and immigration, education, and a trending younger population of producers over an older one of state service consumers. Doing that, while reforming how the government deals with state assistance and minimizing waste will grow the tax base, and allow tax relief to occur which will hopefully add fuel to a resurgent economic fire.
I leave it to you to decide if Paul LePage and the Republican party can do that.
I do know one thing – I know Libby Mitchell will not even hint at these types of radical reforms, and while I think that Cutler is genuine, intelligent, and very serious about confronting the state’s problems aggressively, I still have severe doubts that ultimately he will tackle the right reforms and will truly smack the public sector in the face to pursue private sector growth. That leaves Mayor LePage in my mind as the only possibility for a reformer in the mold we need, but I do have some questions about his approach to government that have yet to be answered as I watch the campaign.
We will see.