Magical Thinking in My Sunday Paper

[Newspaper Fail]

A few years back, my local paper, Foster's Daily Democrat, implemented a massive price increase for a daily subscription. After some discussion, Mrs. Salad and I decided it wasn't even close to worth what they were asking. So we cut back to a Sunday-only subscription; we could justify that for the coupon sections and the reprinted crossword puzzles from the New York Times and the Los Angeles Times. Fun, and theoretically money-saving!

The news coverage, on the other hand, is dismal: reprinted AP stories, and a lot of thinly disguised "progressive" advocacy pieces written by young journalists who can't keep from being activists.

I sometimes make the mistake of reading the opinion columns. This past Sunday brought one bad enough that I can't resist blogging about it: Maine budget must become vehicle for change by Douglas Rooks. Rooks is pretty much a straight partisan Democrat cheerleader. He was more or less apoplectic during the two-term Maine governorship of Paul LePage (2011-2019).

But today, Maine is under unified Democrat control: Governor Janet Mills, a 21-13 advantage in the Maine Senate, and an 80-66 advantage in the Maine House of Representatives. So Rooks should be pretty happy, right?

Well… no. Problem number one: Governor Mills' just-released budget proposal doesn't raise taxes! During the reign of the despised LePage, the top marginal tax rate was cut from 8.5% to 7.15%! (LePage wanted a bigger decrease but didn't get it.) Rooks bewails:

Mills has accepted much lower income tax rates, saying her budget proposals “do not change tax rates and do not create new programs.” And that’s just the problem.

With a presidentially inspired insurrection roiling the nation and the pandemic laying bare the desperate inequality experienced by ordinary Americans, this is no time to stand pat.

Senate President Troy Jackson addressed this, saying “We may have to look at our tax code.” As he put it, “A lot of people have done very well during the pandemic.”

I'm as outraged about the "presidentially inspired insurrection" as the next guy, but using it as an excuse to raise taxes is an impressive logical leap.

Rooks echoes the usual class-warfare platitudes about "having the rich pay more" and "widening economic disparities". What he doesn't say: that 7.15% tax rate is still the tenth highest among the fifty states, And it kicks in pretty quickly: you pay it starting at $52,600 for a single filer, $105,200 for joint filers.

In comparison, the People's Republic of Vermont's top rate is slightly higher (8.75%), but a single filer has to make $200,200 to pay that, joint filers $243,750.

And that's just the income tax. Overall, Maine residents endure the fourth highest tax burden among the fifty states, behind only New York, Hawaii, and Vermont. And Maine is just barely behind Vermont (10.57% vs 10.73%).

But that's not Rooks' only gripe:

On the spending side, too, Mills’s budget has disappointments. While providing modest increases in municipal revenue sharing and school funding, it “flat funds” the University of Maine System at its current $230 million.

Oh no! Flat funds!

But let's hear the argument:

This is short-sighted. If Maine is ever going to bridge its income gap with the other New England states, it will have to invest in the “knowledge economy” that provides most of the future’s good jobs.

Public universities can be engines of economic growth, and Maine has seen promising results from research in forest products and offshore wind generation, but new industries won’t come to fruition – and attract private funding – unless the state makes greater investments.

The same is true for all college, and community college, programs. At one time, state appropriations covered 70% of the university budget; now it’s just 30%.

We’ll never solve the problem of college affordability – beyond the currently trendy idea of canceling past student debt – unless the state steps up, and doesn’t continue falling back.

"Stepping up" is good! "Falling back" is bad!

Argument by cliché.

This is the magical thinking alluded to in the title of this post. What do you have to believe in order to think that shoving more taxpayer money at the UMaine system will cause Maine's "income gap" to shrink?

As opposed to, say, causing nicer cars to appear in UMaine's Faculty/Staff parking lots?

You'll see all sorts of arguments: university education is an investment in human capital; an educated workforce attracts businesses to a region; university research and development can spill over into private industry, startups, etc. Not coincidently, I suspect, a lot of these arguments are made by folks affiliated with universities.

We won't get into the weedy arguments here. But since Rooks offered increased UMaine funding as a solution to Maine's "income gap with the other New England states": According to the State Higher Education Executive Officers Association:

  • New Hampshire appropriated $3,185 per full-time enrolled (FTE) student in 2019. That's a 40.9% decrease since 1980. And that's dead last among the fifty states.
  • Maine appropriated $8,013 per FTE student in 2019. and there's been 13.1% increase in that figure since 1980. That's roughly comparable to the US average ($8196); not lavish, but certainly not penurious.
  • Since 2009, Maine's FTE enrollment has dropped by 5.6%. In comparison, New Hampshire's increased by 6.0%,
  • But what about that "income gap"? Well, pre-pandemic, Maine's per capita personal income was $50,950. That is, indeed, below all other New England states. Compare (specifically) to New Hampshire:'s $63,880.

Throwing more money at public institutions of higher education is not the slam-dunk for state prosperity that Rooks claims.

If Maine really wants to get on the path to economic betterment, a good place to start is (1) ignore Douglas Rooks; (2) peruse the Freedom in the 50 States website. Key points of comparison:

  • New Hampshire is ranked #2 for overall freedom; Maine is ranked #39.
  • This is despite Maine being ranked #1 in the entire nation on issues of "personal freedom". New Hampshire is merely "pretty good" on that score: #5.
  • So where does Maine fall short, freedomwise? You guessed it: on "economic freedom" (fiscal and regulatory policy) it comes in near-last: #44. New Hampshire: #3.
  • Here are Cato's policy recommendations for Maine:

    • Fiscal: Cut spending on public welfare and housing and community development. Maine is one of the most free-spending states on public welfare in the country, and it also spends much more than average on housing and community development. Also cut individual and corporate income taxes.
    • Regulatory: Roll back exclusionary zoning, perhaps by allowing state veto of local zoning ordinances that limit housing supply.
    • Personal: Sell off the state liquor stores and replace the markup with a transparent ad valorem tax, as Washington has done. Maine will never be able to compete with New Hampshire prices anyway; perhaps it can compete on convenience.

I don't know; our stores are pretty convenient. Famously, outlets for both northbound and southbound traffic on (both) I-93 and I-95. Currently offering curbside pickup!

Last Modified 2021-01-19 6:14 PM EDT