On tape, Gov. LePage claims he’s hiding $47 million from Democrats

Troy R. Bennett | BDN

While speaking to a meeting of the Greater Portland chapter of the Informed Women’s Network, a conservative group, Governor Paul LePage told the assembled crowd that the economy had improved, state revenues were exceeding expectations and there was a significant surplus about which he had not yet informed Democrats in the Legislature.

“The economy as a whole is actually doing pretty well. I don’t want to tell any Democrats because they’ll have it spent before Christmas, but we have about $47 million since July 1 over budget,” said LePage.

If LePage’s numbers are accurate, this large of a surplus would be a big surprise. The latest general fund revenue update from the Maine Office of Fiscal and Program Review shows revenues under budget by $8.3 million for August and down $6.7 million for the fiscal year. Even with a very good September, it seems unlikely that revenues could really be that high. If they have exceeded projections to that degree, LePage has been true to his statement at the event and has failed to inform Democratic leaders.

“If the Governor has a secret surplus, now is the time to put it on the table,” said House Speaker Mark Eves of North Berwick in response to LePage’s statement. “The Governor can’t keep the Legislature in the dark while he sits on cash that could prevent layoffs or stave off cuts to our students or schools.”

Governor LePage has said recently that he will refuse to submit a supplemental budget to the Legislature. A supplemental submission is the normal course of action for the state’s chief executive in order to keep the budget balanced and comply with Maine’s Constitution.

The claim of a secret surplus is especially galling given Governor LePage’s call just two weeks ago for $35 million in cuts to next year’s budget, including slashing education funding, Head Start, and health care programs for children.

Joel Johnson, an economist from the Maine Center for Economic Policy who sits on the state’s Consensus Economic Forecasting Commission, also couldn’t offer any clues as to what LePage was talking about, but noted that even if there were increased revenues in the last month, it would be wrong to draw broad conclusions about the economy.

“If you insist on using state revenue as an economic indicator, you’ll want to separate the signal from the noise by looking at the longer term trends instead of monthly or quarterly gyrations,” said Johnson. “From here, the trend is clear: inflation-adjusted general fund revenue in the current two-year budget period is forecast to be lower than in any two-year budget period since the late 1990s. That’s due to a lousy economic recovery from the recession and budget-busting tax cuts that, in dollar terms, mostly benefited higher income Mainers.”

Download the audio here. More from this event coming soon.

Mike Tipping

About Mike Tipping

Mike writes about Maine politics and policy with a focus on analysis and explanation. He works at the Maine People's Alliance and Maine People's Resource Center, writes a political column for the Portland Press Herald