Gov. Janet Mills can take one smart, deliberate step this spring that will give her leverage for the rest of her time in office: pass a budget without a tax increase.
And not one of those classic “it’s not a tax increase, it’s a fee” efforts that we’ve seen from other administrations. A real, honest to goodness tax-increase-free budget.
Mills promised no tax increases in her first budget while she campaigned last year and her first budget plan, released in February, doesn’t include any. But not many people believe she’ll stick with it. Republicans certainly don’t believe it, and her allies on the Left don’t see a reason to hold back the government expansion they’ve been fantasizing about for eight years.
But Mills, and supporters in her own party, would be wise to focus on the long game.
One of the biggest problems Republicans had during the LePage administration was that the former governor never accumulated enough political leverage to actually accomplish anything. Former Gov. Paul LePage treated every day like it was the last day on Earth, and instead of shoring up allies or assuaging the concerns of the electorate, he burned political capital faster than he could accumulate it.
So LePage ended up struggling to accomplish much of anything. And he turned to tax increases to find revenue just like every other governor inevitably does. LePage wanted to implement an increase and broadening of the sales tax. And he fantasized about raising property taxes on hospitals and non-profit organizations like land trusts, repeatedly spreading false claims about the potential revenue impact of these plans.
LePage, despite all the bellicose podium-pounding he directed at taxes, repeatedly tried to raise them to fund his priorities. Fortunately, he failed in most of his policy initiatives, and we escaped what would have been a massive expansion of taxation had he not been so politically inept.
Mills has an opportunity to run a different course.
In her first budget, Mills has carte blanche with her own people. It may not seem this way, because all of her allies who helped get her elected are banging on the door to influence her decisions. But the truth of the matter is, she could anger every single one of her liberal allies with this first budget and still have them eating out of the palm of her hand by the end of her first term.
The thing she could do differently is to eschew the tradition of political payoff in her first budget. Instead of crafting a budget that pleases her left-wing allies, she could pass one that respects the fact that most Mainers feel they pay too much in taxes. She can look realistically at revenue predictions and spend accordingly, and hold off on any increases until she’s got a little more time under her belt. This is what her rhetoric so far has suggested, but actually using her political muscle to get such a budget over the finish line would be a whole different ball game.
A tax-increase-free budget would be a shock to Mills doubters. Every Republican in Maine is expecting her to grow government and increase taxes, despite her rhetoric. Republicans are looking back to the three decades of profligate government expansion that happened in Maine prior to Republicans taking back the State House in 2010, and expecting the same thing to happen again.
But Mills can blow minds if she doesn’t go down that road. At least right now.
By avoiding the standard points of conflict between Democrats and Republicans right out of the gate, she will create goodwill and leverage for herself with voters and legislators. It will be far more difficult for the same “tax and spend” talking points to be rolled out if we have a chief executive who can actually govern to the will of the people without seeming beholden to donors and special interests.
Technically, a slight tax increase in any budget is not a major issue. But symbolically, a tax increase of any size in her first budget is the manifestation of the stereotype all of Mills’ opponents are waiting to see fulfilled. Mills could show a higher level of political acumen by holding the line on this budget, and using the leverage it generates to achieve her broader goals over the long term.