Maine’s expected budget gap shows the perils of fiscal indulgence

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Brad Farrin represents District 3 in the Maine Senate and is the Senate Republican lead on the Legislature’s Transportation Committee.
As the Senate Republican lead on the Legislature’s Transportation Committee, I was appalled when Democratic lawmakers on the Appropriations and Financial Affairs Committee tried in April to hijack the oversight of the transportation budget from my committee. It was part of a series of efforts by this group to also cut funding for Maine’s dairy farmers and reduce the tax break for those receiving a pension.
What struck me the most was that these lawmakers — especially Appropriations Committee co-chair Rep. Melanie Sachs — went against the governor and their own party leadership to try to divert the milk money, which would hurt seniors. Even the Mills administration weighed in on Democrats’ “unpredictability.” Fortunately, Republicans and enough Democrats cried foul and they reversed course and restored the funding.
Like a special-ops mission, the budget raid was planned in a back room at the State House and executed in the middle of the night. Unfortunately, that lack of transparency, which even surprised those in attendance that night, permeates much of Maine’s budgeting process. Maybe that and the unwillingness to seek input from more fiscally conservative Republicans is what led to the Mills administration’s announcement that we will have a projected  nearly $1 billion budget shortfall over the next two years.
According to the state’s budget officer, Maine’s 2026-2027 biennial budget is projected to have a $949 million structural budget gap, which is the difference between forecasted revenues and expenditures. The General Fund’s shortfall is projected to be about $636 million, while the Highway Fund is expected to see a $313 million deficit.
The latter is more alarming since it represents 33 percent of the current budget, a much larger percentage than the General Fund’s six percent gap.
Maine has had these structural gaps for the past two decades. For example,  we’ve seen this pattern before during the Baldacci administration. History sometimes repeats itself.
When Gov. Paul LePage took office in 2011, he faced a budget gap of $1.5 billion including a deficit of about $1.2 billion in the General Fund. Despite curtailments made during the prior administration, the gap only grew under Gov. John Baldacci to the point that when it was over $1 billion, LePage had very little choice but to cut expenditures drastically. More importantly, it worked.
The difference here is Baldacci faced a revenue problem caused by the housing crisis in 2008 that flatlined the economy and crashed many state budgets for years. This time, revenue is not the problem — General Fund revenues are actually expected to grow by $336 million in the next biennium.
No, this time Maine has a big spending problem.
Gov. Janet Mills and her Democratic allies in the Legislature have spent nearly every dollar that has been collected by the state government over the past six years. During that time, our state expenditures have ballooned from $7.2 billion under the LePage administration to about $10.5 billion today, including one-time transfers.
That is a 46 percent increase — more than twice the 20 percent rate of price increases the Biden administration has given us since he took office.
And because Democrats have been in charge of state government for six years, they have been able to pass partisan majority budgets that use every revenue dollar available without any Republican support. That doesn’t even include the billions of dollars that flowed through the state during the COVID-19 pandemic.
In other words, Democrats definitely own the budgets they approved, as well as the projected billion-dollar budget gap that has resulted from it.
They must also own the fact that current Democratic legislative leadership has largely rubberstamped Mills’ budgets the past six years or spent even more than she requested. And despite our constitutional oversight role, the Legislature doesn’t review the portion of the state budget approved in prior years. That certainly will have to change.
Unfortunately, progressives are already lining up to raise taxes to cover the shortfall, which Mills promised not to do but did so anyway. And considering that we already have the highest property tax burden in the nation, the fourth-highest tax burden overall and the sixth-highest electricity rate in the country right now with more increases coming next year due to the solar development subsidies, I’d say we are tapped out.
What this projected budget shortfall clearly shows is we need a new direction in Augusta and a more responsible approach to spending taxpayers’ hard-earned dollars. Mainers should expect nothing less.