Gov. Paul LePage has been named one of the four most fiscally responsible governors in the country by a conservative, anti-tax libertarian think tank called the Cato Institute.
LePage ranked third among four Republican governors whose actions over the past two years earned a grade of “A” on the institute’s 2014 Fiscal Policy Report Card on America’s Governors. The other governors who received top marks were Pat McCrory of North Carolina, Sam Brownback of Kansas and Mike Pence of Indiana.
LePage received kudos from the institute for major income tax cuts enacted under his leadership of Republican majorities in the House and Senate in 2011 and for keeping general fund spending “roughly flat” since being in office. Also at play were LePage’s various welfare reform initiatives, including a five-year lifetime cap on receiving Temporary Assistance for Needy Families benefits and his opposition to the expansion of Medicaid under the provisions of the federal Affordable Care Act, which Cato argues would be a budget-expanding proposition. LePage also was credited for vetoing a biennial budget proposal last year that relied on temporary increases in the sales and lodging taxes for balance, though his veto was overridden by the Legislature.
The institute even cited a proposal by LePage to put a question to voters statewide about whether they wanted a $100 million tax cut, which was rejected in the Legislature because LePage offered no outline of cuts he’d propose to achieve the lost revenue.
Not mentioned in the Cato analysis was LePage’s constant and sometimes controversial focus on fiscal responsibility, including his refusal to issue voter-approved bonds, first “until we get our spending problem fully under control,” then in an effort to force lawmakers to accept his plan to pay old Medicaid debt to hospitals, and then to force the Legislature to replenish the state’s rainy day fund to a certain level.
The institute also doesn’t mention some of the attacks LePage has faced from opponents who say he has been fiscally irresponsible and reckless. Democrats and others have long decried his income tax cuts, which came as part of LePage’s first biennial budget bill — because much of their effect was pushed off until the following year without any proposals for cuts or revenue increases to pay for them. In his next biennial budget, LePage proposed and won steep cuts to municipal revenue sharing — which is money the state has long funneled to towns and cities — and passed on teacher retirement costs, which had the effect of forcing some municipalities to raise property taxes. LePage argued that local officials could have avoided property tax hikes by cutting their budgets, though many towns have been operating under significant financial constraints for years.
LePage’s method of repaying the debt to hospitals — by selling a revenue bond to be repaid from the proceeds of renegotiated state liquor contract — has also come under fire, despite the bipartisan support it received in the Legislature after weeks of maneuvering by Republicans and Democrats. Democratic gubernatorial nominee Mike Michaud has said in recent weeks that the fees and interest tied to that revenue bond could have been avoided by continuing repayment of the debt out of the general fund, which was what was being done under Democratic Gov. John Baldacci. The Department of Administrative and Financial Services said Wednesday that fees and interest are expected to reach about $55 million by the time the 10-year note is paid off.
Between 2005 and 2010, Baldacci paid off more than $220 million of the debt — which pulled down approximately $2 of federal funding for every $1 paid by the state — and enacted pay-as-you-go legislation to stop the accrual of more Medicaid debt. However, the Michaud’s suggestion that the hospital debt could have been paid down significantly in the lean years since the Great Recession hit in 2008 ignores the fiscal turmoil and spending cuts that have taken place since then.
It’s worth noting that two of the other three Republican governors given A’s by Cato could face ouster because of their hard-right policies — just like LePage, who is polling neck-and-neck with Michaud.
In Kansas, Gov. Brownback served in the U.S. House and Senate for 16 years before dipping his toe in the 2008 presidential primary and was considered unbeatable by some when he was elected governor in 2010. Following a turbulent first term during which he cut taxes aggressively, he is polling about 4 percentage points behind his Democratic challenger for the November election, according to Real Clear Politics. Some Republican lawmakers in Kansas even took the unprecedented step of endorsing Brownback’s opponent.
In North Carolina, Gov. McCrory faces an approval rating of between 30 and 40 percent. Though his current term doesn’t end until 2016, North Carolina’s Democratic attorney general has polled in a virtual dead heat in a survey that tested a hypothetical match-up.
Indiana Gov. Pence, who was elected to his state’s top job in 2012 after serving 12 years in Congress, is also not up for reelection and according to reports has enjoyed a successful first two years in office in the heavily Republican state. Pence is being discussed by some as a possible contender for the GOP presidential nomination in 2016.
Six governors, all of them Democrats, were given grades of F by Cato, the closest of which to Maine was Gov. Deval Patrick of Massachusetts. Six GOP governors also scored poorly, receiving D’s.
Correction: A previous version of this article incorrectly stated that LePage’s income tax cuts were contained in a supplemental budget. They were enacted as part of LePage’s first biennial budget.