Governor John Baldacci:
Since late spring, Maine’s economy has consistently outperformed the projections. After years of declining revenues, we are beginning to see incremental improvements.
Our State finished last year with a revenue beating projections by about $70 million dollars, making it possible to reduce our long-term obligations in borrowing and rebuild our reserves to about $50 million dollars.
So far this year, revenues are strong. For October, the revenues outperformed the forecast by more than $30 million dollars. And since July, General Fund revenues are over budget by $56.7 million dollars.
The numbers point to an economic recovery.
But most people aren’t feeling that recovery in their every day lives. That’s because most if it is a corporate recovery, where profits for businesses, particularly large companies, are rebounding. Many companies, reacting to the recession, reduced work hours, salaries and benefits for their employees.As their profits have begun to rebound, employers are restoring some of those hours and benefits, but they are reluctant to hire new people.
Maine’s unemployment level is significantly lower than the national average – more than two full percentage points – and it continues to fall, but job creation continues to lag. And capital remains difficult to access for many small businesses.
To put some context behind the numbers, the policies and practices we put into place to combat the recession are having an effect.
• So by holding the line on taxes, while other states have raised theirs, we have given our people and our industries a competitive advantage.
• By wisely using Recovery Act dollars and putting them to work quickly, we have created jobs while making critical investments in our economic health.
• And our investment strategy, validated by voters, has put people back to work, saved a railroad, rebuilt roads and interstates, and reduced our dependency on foreign oil.
• We’ve helped new companies develop the technologies of the future, invested in the research of composites and alternative energy that will help to drive our economy forward.
• Improving revenues and reserves will give the next Governor and the next Legislature more options as they consider the State’s next two-year budget.
• Our frugality and spending discipline endorsed by bipartisan supermajorities for at least five straight budgets, have set a sound foundation to build upon.>
Nonetheless, there are going to be many tough choices and hard decisions.
Our State leaders will be forced to weigh access to health care, taxes, economic development and education. There will be more needs than there will be resources to meet them. But the lessons of bipartisanship, controlled spending and compassion should still be heeded.
During the worst of recessions, Republicans and Democrats and independents worked together to solve problems and position the State for recovery.
We passed comprehensive energy policy, balanced the State budget, supported K-12 education, protected the elderly, the sick and our children. And we did it without raising broad-based taxes.
And as I look at the roster of people who will take on these responsibilities, I am encouraged.
Former Rep. Sawin Millett is leading Governor-elect LePage’s budget team. As a Republican lead on the Appropriations Committee, he was an honest broker and a good partner as we worked to balance difficult budgets. New Senate President Kevin Raye, as Minority Leader, worked in good faith and eventually helped to pass bipartisan budgets. And new House Speaker Bob Nutting, as a member of the Appropriations Committee, understood the imperative of working together cooperatively.
New House Democratic Leader Emily Cain led the budget process through the Legislature as the Chair of Appropriations, treating all voices fairly and objectively and producing a strong plan. And new Democratic Senate Leader Barry Hobbins led an Energy Committee that remained committed to consensus, and unanimously passed some of the most significant, comprehensive energy legislation in a generation.
The work ahead will test each of them. But I know that they are up to the task at hand, that they have the tools, the experience and knowledge to be successful and that they will put the people of Maine first, as they always do.