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| C | Maine |
• Population (rank): 1,321,574 (40)
• Average per capita income (rank): $23,226 (30)
• Total state spending (rank): $7,854,687,000 (40)
• Spending per capita (rank): $5,943 (13)
• Governor: John E. Baldacci (D)
• First elected: 11/2002
• Senate: 35 members: 18 D, 17 R
• Term limits: 8 years (consecutive)
• House: 151 members: 90 D, 59 R, 2 I
• Term limits: 8 years (consecutive)
Maine has an on-again, off-again relationship with performance measurement that dates back to the early 1990s. It recently entered an "off-again" phase. Right now, agencies are not required to include performance data with their budget requests — although many continue to use the information internally to make decisions.
Predictably, all of the involved parties are quick to blame others for the current state of affairs. The legislature, which fell in love with performance measurement back in 2001, lost interest when its supporters were term-limited out of office. "You had a group that's very committed to performance budgeting and put it in place," says state Senator Peggy Rotundo, who chairs the Appropriations Committee. "Then with the new people rotating through, you didn't have the same level of understanding. It sort of lost steam over a period of time."
While performance information has gone by the wayside, other elements in the state budget process are improving. A new, more transparent budget format debuted with the 2007-09 biennial budget and has been almost universally embraced by the legislative and executive branches.
Prior to the budget reforms, the state passed a "Part 1" budget that was a continuation of current services, followed by a "Part 2" budget that consisted of longer-term initiatives. These now have been combined in a way that is similar to procedures used in most other states. Equally important, the new budget is organized by program, not line item, making it a more effective vehicle for the governor to set a strategic direction. "Now, everyone understands what the budget purchases and can see it in one place," says Controller Ed Karass. "Everyone has an opportunity to make better decisions."
This opportunity is critical, given Maine's shaky history of fiscal decision making. Consider, for example, a tax-credit package that passed in 2007. It was designed to help keep college graduates in Maine after they finished their education by enabling them to pay back loans more easily. The problem, says Ellen Schneiter, the state's budget director, is that while the system will be relatively cheap in the short run, "you look out 20 years or so and it's going to be really expensive." Regrettably, Maine has had a penchant for this kind of shortsightedness in its recent fiscal history.
Lurking in the shadows is a citizen initiative that could wreak havoc on the state's finances. If it passes this fall, it would cut or eliminate the excise tax on automobiles, which brings in some $203 million a year. Where would the money come from to make up for that loss? Hard to say, particularly given that the state is being tightly squeezed by heavy Medicaid costs and a 2004 initiative requiring increased levels of funding for education.
Some people in Maine are optimistic about the potential of the new budget format to curb bad habits. Although the state is still far from achieving structural balance, it's been making some progress — in part by restructuring statewide administrative functions so that they don't require as many full-time employees. That consolidation, paired with a lack of salary separation between new and more seasoned employees and a new law that requires automatic payroll deductions for union dues, has led to low morale among state workers in recent months. "My hate mail is at an all-time high," says Alicia Kellogg, director of the Bureau of Human Resources.
The clear next step for the state, after everyone gets used to the new budget format, is to reintroduce performance information into the budget process in a way that makes clear to the legislature and to agencies that it's more than just a burdensome paper exercise.
For additional data and analysis, go to pewcenteronthestates.org/gpp.