Are Maine Democrats Calling For Right-To-Work, corporate income tax cuts, etc., or just playing political games?

Do Maine Democrats support Right-To-Work laws, cutting regulations, income & corporate tax cuts, school choice and education reforms? Or are they just playing games? Dems new ad points to Forbes 2011 Best States For Business rankings.

Have you seen the new ads the Maine Democratic party is running? They’re cartoonish jabs at five Maine Senators, all Republicans, that blame them for “cutting taxes for the rich” which even the Portland Press Herald only found half-true because it actually cut taxes for virtually all Mainers, a rather dubious claim that welfare reform for 19- & 20 year olds is “cutting health care” and that by opening up the health insurance markets with L.D. 1333, insurance companies will “make millions.”

Here’s our take on these three:

1. Good for Maine that we didn’t fall into the class warfare trap set by progressive legislators such as Seth Berry. This MPBP report and subsequent troubles we’re seeing in California, Illinois, Greece, etc. show exactly why a “punish the rich” approach doesn’t work.
   
2. Healthy, able-bodied 19 & 20 year olds are not being denied health care. They are simply not having their every health need & expense put on the taxpayers back. The Maine people know that we must focus Maine’s limited resources on those who need it most, our fellow Mainers who are elderly, disabled and most vulnerable.
   
3. It’s ironic to watch the progressive fringe of the political left get upset about insurance rates when reports indicate premiums will be reduced by as much as 60% as a result of L.D. 1333. Up until this year, they were quite content to just tell the people of Maine that health insurance premiums rising by more than 10% was good policy – look back at your own health insurance costs under their rein of regulatory terror for evidence.

Now that we have those claims out of the way, here is where it gets confusing…

The Democrats attack ad also cites Forbes Best States For Business 11/22/11. If you follow this link and take a look at the methodology of the Forbes report the Democrats are citing, it hints at one of two things, either a damning indictment of their own positions on the issues, or an almost complete 180 degree reversal of their positions if they want to see Maine’s business ranking improve. Here’s why:

The criteria Forbes utilizes to determine ranking include, among other things:

• No fewer than 6 items where Democrats opposed reforms in the 125^th Maine Legislature that would have improved Maine’s standing with Forbes.
  
• At least one item (sales tax expansion) that they voted to worsen our standing in the 124^th Legislature.
  
• At least 6 data points with a five-year look back that land squarely in the time period they were in the majority under John Baldacci.
  
• Numerous data points that are the result of decades long policy decisions, such as High School & College attainment; number of four-year colleges in Maine; business opening & closing statistics; number of large companies located in Maine; Moody’s bond rating; school test performance from Dept. of Education, etc.

In fact, many reforms were undertaken, over the objection of the Democrats, to improve Maine’s standing: the largest tax cut in state history; unemployment insurance reform; workers’ compensation reform; several regulatory reform bills; a couple small energy reforms; introduction of charter schools.

Of course, right-to-work legislation, which appears in several forms in the Forbes report as a positive step forward that would improve our ranking, ultimately stalled under pressure from the Democratic caucus and labor groups.

Here is more information on Forbes Criteria.

Business Costs: (Forbes’ most heavily weighted component)

• Moody’s Analytics Cost of Doing Business Index (Labor, Energy & Taxes with Labor weighted most heavily) Democrats broadly opposed workers compensation reform to lower labor costs. Democrats broadly opposed energy reforms to reduce energy costs. Democrats used tax cuts for Maine businesses as a rallying point in their opposition to tax reform. 

   

• Tax Foundation Report on Business tax burdens that shows a slight improvement in 2012 from 2011, but still ranks Maine overall at #37. Democrats broadly opposed L.D. 849, introduced by Senate Majority Leader Jon Courtney, which will reduce Maine’s income tax rate to 4% over time. This certainly will improve Maine’s tax ranking. Democrats broadly opposed unemployment reform to reduce unemployment insurance rates. The Tax Foundation report says Maine was 40^th most expensive in the country, but this was before passage of the recent reform. Maine ranks 10^th in sales tax, but just two years ago, the Democrats tried to hike sales & use taxes on more than 100 new products. 

Labor Supply

The Forbes report used a series of data to rate Maine’s labor supply, among them, census data and other data which is insightful.

• High School and College attainment data from the US Census bureau. No administration or majority could really affect this data much in their first 10 months in office, primarily because it would have been collected far in advance, so it’s essentially an indictment of the policies of the past 20 years, but even so, what did Maine Democrats do to help improve this? They opposed charter school expansion, school choice and other reforms. Maybe they think high school and college attainment rates are “good enough.” 

   

• Net migration over the past five years and projected population growth over the next five years. We’re not even going to attempt to imagine how population trends from 2005-2010 have anything to do with those five Senators who first became part of a majority in 2011.

   

• Percent of labor force represented by a union. Democrats vehemently opposed right-to-work legislation, which would have improved Maine’s Forbes ranking. Have they changed their minds and are now in support of right-to-work, or are they just playing games? 

Regulatory Environment

Forbes used a few data points to assess Maine’s regulatory environment, including:

• Pollina Corporate Real Estate Index: Tax Incentives, economic development efforts
• Pacific Research Foundation: Tort Liability Index
• PRI: US Economic Freedom Index
• Moody’s Bond Rating
• Transportation Infrastructure Including Air, Highway, Rail (everyone agrees on the need for infrastructure)
• Credit to Right to Work States

Economic Climate

• Job growth over the past five years.
• Income growth over the past five years.
• Gross state product growth over the past five years.
• Unemployment over the past five years.

Growth Prospects

• Moody’s Analytics Job, Income and Gross State Product five-year projections from Moody’s Analytics.
• Business opening and closing statistics from Small Business Administration.
• Venture Capital Investments.

Quality of Life

• Poverty rates from Bureau of Economic Analysis.
• Crime rates from the FBI.
• Cost of living from Moody’s.
• School test performance from the Dept. of Education.
• Health of Maine people from United Health Foundation.
• Mean temperature of the state.
• Number of top-ranked 4-year colleges per Forbes Annual College Rankings.

After reviewing the Forbes Rankings touted by the Democratic party in the “Rubber Stamp” ads, one thing is clear, either they are hinting at a complete reversal of their long-standing policy positions, or they have made a perfect political stumble that resulted in them “firing torpedoes” at their own ship.

Until the Maine Democratic party press release arrives announcing party support for right-to-work legislation, elimination of renewable energy mandates, education reform, additional workers’ compensation and unemployment insurance reforms, and support of effort to reduce labor costs, among other things, we’re going to have to assume the latter.

 

 

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