Governor Baldacci on the 2014 race and the importance of fixing the national debt

BY RAMONA DU HOUX

March 27th, 2013 

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Governor John Baldacci at Madison paper mill in ‘07. When he came to office mills were closing in on instance he had the state police protect a mill from asset raiders. He worked tirelessly to save many of these companies helping them transform their businesses. Photo by Ramona du Houx

Governor John E. Baldacci has been giving addresses at different events around the state to spread awareness about the nation’s $16 trillion debt. Baldacci said that at the core of the issue is the inability of Congress to take meaningful action to get the country’s books in order.

“It’s a serious issue,” said Baldacci. “Because of the interest payments, we have less to spend on programs that could stimulate the economy and help create jobs — $600 billion less. These interest payments are crowding out a lot of expenditures in health care, in education, in economic development, and for Department of Defense issues. It hurts our ability to protect our country — to protect the programs our citizens, especially our most vulnerable, need — and to invest.”

Baldacci co-chairs Maine’s Fix the Debt campaign with former state Senate President Rick Bennett, a Republican. In 1994 they ran against each other for Congress. Fix the Debt is a nationwide, nonpartisan effort to engage legislators, community leaders, and businesses across the country who want to see elected officials step up to solve our nation’s fiscal challenges. The two men are dedicated to raising the awareness of the national debt so politicians in Washington, DC, will be encouraged to take action.

“I wanted to send a message that I’m willing to work together with someone I campaigned against in a difficult, hard-fought campaign that left us both with a lot of scars,” said Baldacci.

When the former governor was a congressman, he served the majority of his time under President William Jefferson Clinton. It was a time when Baldacci was directly involved in dealing with the nation’s debt.

Back in the 90’s, both parties were able to come together to work out solutions, though there was stiff partisan divide on a number of issues. The U.S. Government worked according to how the founders prescribed it to. By the time Clinton left office, there was a budget surplus and the economy was booming.

“We were successful in ’95 and ’96. We went through the same sort of struggles in order to get the different parties to sit down and talk about the debt,” said Baldacci. “We balanced the budget and, for the first time in modern America, started to retire our debt, which was about $4.6 trillion. The key then, and it will be now, is to get the parties together to work things out. It’s really about getting on a fiscal path towards balance. That’s how we managed it in Maine.”

When Baldacci became governor, he walked into having to run a state in recession.

“I not only had the structural gap of $1.3 billion — the King administration had taken out a loan of $250 million for hospital reimbursement issues, and paper mills were closing. It was a very difficult time,” said Baldacci. “We had one of the highest tax rates in the country so we couldn’t raise taxes, and with the recession, we couldn’t cut back on programs people depended upon. We had to figure out ways to grow and invigorate our economy and, at the same time, not cut people who needed assistance from benefits.”

He turned the situation around, and after two years, the state had a surplus with a rainy day fund.

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Congressman Mike Michaud, Gov. John Baldacci and Dr. Habib Dagher discuss Maine’s offshore wind floating turbine technology and how research and development bonds make the opportunity possible. Photo by Ramona du Houx

While in office, he took on school administrations by consolidating districts. Too much funding was being funneled into administration positions and not enough was being used to go directly towards a child’s education. There was stiff opposition, but by taking his proposals around the state to different districts, he garnered support to pass the legislation.

He consolidated the prison and jail system, streamlining services. Cumberland County’s jail system is a prime example of how the new program has been successful. State government was also streamlined and agencies merged to bring better services to the people of Maine and to save funds that were being wasted, as agencies had been duplicating their efforts. In 2011 he went to Poland, when he was invited by their commissioner of education to explain how Maine consolidated schools.

“Measures that we underwent in Maine, in terms of reorganizations and integrations, could be done nationally,” said the former governor.

To invigorate the economy, he invested in research and development with voter-approved bonds, in education by creating the community college system, and in transportation by improving the state’s ports, rails, and roads. By the end of his service, Maine’s tax rating had gone from the 5th worst in the nation, compared to other states, to 15th according to state figures.

“When you make investments in research and development, what you are really doing is helping business and industry have the latest technologies so they can compete more successfully in the global market,” said Baldacci. “These private sector companies that get help to develop their products create secure jobs and growth.”

When his eight years ended, the country was in the midst of the worst recession since the Great Depression, but Baldacci managed to actually leave a surplus of over $100 million behind for his successor, Governor Paul LePage. That was important to him.

“I didn’t want anyone to have to deal with what I did when I got into office,” he said.

In 2011 Baldacci worked for the Department of Defense (DoD) in Washington, DC, to bring his expertise in health care issues to help DoD programs. He researched and reported on DoD’s best practices so they could implement changes.

“The recommendations are under review and could be a part of the cost savings they are currently looking at,” he said.

He also saw how the DoD could consolidate health care departments.

“The DoD spends $1 billion in services. If we could consolidate purchasing, electronic data keeping, and human resources, then health care services and quality would improve using the best practices that each of our military branches have,” said Baldacci.

Baldacci is in favor of the right kind of consolidation policies, but he says that cutting back expenditures alone will not help the economy and inevitably hurts the most vulnerable. He’s troubled by LePage’s policies and the manner in which he governs.

“I’m only seeing one side of the equation. They’re talking about cutting and consolidation, which I’ve done probably more than anybody. At the same time, there is no talk about investing in research and development or in education,” he said. “You have to balance the equation with investments so the quality of life of our citizens improves.”

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Governor Baldacci with workers from a company that was granted Pine Tree Development Zone status. PTDZ distinction gives companies tax credits, once they hire workers. Over 310 companies from around the world have come to Maine, or expanded here because of these benefits. Photo by Ramona du Houx

LePage’s refusal to allocate voter-approved bonds goes against the oath of governor.

“He’s allowing other states to get ahead of Maine. We lose huge opportunities every day. Holding jobs hostage by not releasing voter-approved bonds is wrong. Whatever the people’s wishes are, as governor you have an obligation to execute the will of the voting public. Holding back bond allocations is holding back economic development.”

Baldacci talked to the director of the MRRA — the organization responsible for managing the transition of Naval Air Station Brunswick and its Topsham Annex from military to civilian use — about the bond funds they have yet to receive.

“Steve Lévesque needs those resources so he can continue to refurbish and make the former navy base ready to show prospective clients. Because of the negative economic impact of the base closure, we need to work aggressively to help the region get back on their feet,” said Baldacci. “Every day is[a lost opportunity.”

As governor, Baldacci eased Brunswick and its region’s transition when the base closure was announced by making the entire area a Pine Tree Development Zone, which gave businesses tax incentives to expand or start up. He also created a bond package that helped the Southern Maine Community College establish a branch to teach composite technologies, working with the University of Maine, at Brunswick Landing. He also helped the university establish engineering programs there.

Baladcci said Maine has a tradition of working in a bipartisan way. All his major initiatives, bonds, programs, and budgets were bipartisan.

“In Maine, it takes a two-thirds majority to pass budgets and bonds, which makes it a necessity for lawmakers to work together,” said Baldacci. “You need someone in leadership that has the ability to sit down and meet regularly over breakfast, coffee, or dinner. You need that kind of access to build a relationship so whenever a crisis comes up you can pick up the phone and comfortably talk with each other to work out solutions and garner support.”

The former governor is upset that there is a lack of leadership that lifts up people coming from the Blaine House.

“I’m concerned about the state and the direction Governor LePage has taken us,” said Baldacci. ”I’m tired of the boisterous attitude and all the negative comments that don’t reflect who the people of Maine are or what they believe. It makes it hard to attract businesses to the state, which hurts our economy and reputation around the world.”

At a Bangor Chamber of Commerce event, Baldacci confirmed that he is considering running for the Blaine House in 2014. He said Rep. Mike Michaud or Rep. Chellie Pingree should have the opportunity first to run for governor.

“Our party will have a strong candidate who can work for a democratic legislature and a democratic president accessing the resources and support in Washington to help us. We need to make sure we have universal health care and that we are educating our children for the jobs of the 21st century,” he said.

Currently, Baldacci is a senior advisor for economic development and government relations at the Pierce Atwood law firm in Portland.