Republicans should hold out for a better deal on state budget

By Matthew Gagnon

Late nights are a way of life in the Legislature these days, but even by that new standard, Tuesday (into Wednesday) was a special kind of ridiculous, with votes closing at 3:45 in the morning. 

Of course, there was a reason this time: We may now have, after much wrangling, a tentative budget deal on the governor’s “change package.”

Early morning Wednesday, lawmakers in the Legislature’s budget committee voted almost unanimously to advance a package that will cost somewhere between $800 million and $900 million. Inside the deal, according to the Bangor Daily News, is a compromise whereby the Maine pension exemption from income taxes would increase from $30,000 to $35,000, and then continue raising into the future. The change would account for $48 million in tax reductions by fiscal year 2026.

Given the committee vote, it seems likely this deal moves forward and passes overwhelmingly with bipartisan support in the Legislature. But should it?

For the Democrats, no doubt the answer is yes. They get a whole bunch of their priorities funded, gave up very little and get the additional win of having the endorsement of Republican votes on the whole thing. It is hard to argue that this is not worthwhile for them.

But for Republicans, it should be a moment to reflect.

Generally speaking, I am an advocate for collaboration and compromise legislatively. I have never subscribed to the theory, popular in some conservative circles, that dealmaking is capitulation, and a betrayal of legislators’ commitment to certain ideals. Quite the opposite, in fact. In my mind, compromise is not only necessary to get anything done, but it is how you play the “long game” of politics.

By my reading of history, the left’s commitment to slow, steady incremental change has been responsible for its long-term success at reshaping this country. In contrast, the right’s absolutist “all or nothing” attitude has been directly responsible, in my mind, for them losing ground.

With that said, you don’t just compromise at every opportunity.

In economics, when two parties engage in voluntary trade, it happens because each side believes that the value they are receiving from the other exceeds the value of what they are giving up. This is why both sides can actually “win” from the exchange, despite losing something.

Politics may not be economics, but the same concept holds in legislative dealmaking. In considering a deal, one needs to evaluate what is given up, and what is gained. If the result is mutually beneficial, do it. If it isn’t, don’t. 

Republicans need to ask if what they got in this deal outweighs what they are giving up.

I don’t have all the details, but it appears the Republicans got a small, token tax reform of about $48 million out of a total spending extravaganza of $10.7 billion for the next two years. The problem is the pension exemption was already slated to be raised. The only meaningful change here, by my reading, is the indexing of that exemption. 

In exchange, the Democrats get unconscionable spending increases and government expansion. Again. They also get specific priorities, like $30 million for state-focused child care programs, $25 million for paid leave, $12 million for offshore wind and the approval of the governor’s “Dirigo Business Initiative.” They not only get these things, but they get Republican votes for them.

More importantly, though, the Democrats also get a Republican blessing that the hyperpartisan budget they rammed through earlier this session — a cynical, hard-nosed political betrayal of campaign promises — was a legitimate tactic, and would not ultimately be held against them.

For the second session in a row, Gov. Janet Mills and the Democrats will have campaigned on bipartisanship only to promptly ignore those promises and use their majorities to muscle through partisan budgets against the howling objections of the minority. In each case, Republicans had an opportunity to draw a line in the sand and make clear that they would not cooperate with a governor who disrespected and ignored them and broke the normative budget process.

The first time, they naively decided to endorse her actions and make deals on a supplemental budget. In so doing, they basically said, “it is OK you did this to us, we’ll take whatever you’ll give us.” They handed over a powerful political weapon, allowing the governor to claim she was bipartisan when she wasn’t, and they were bludgeoned in the next election as a result.

Having apparently not learned the lesson the first time, Republicans appear likely to once again repeat that mistake. But they shouldn’t. Compromises are about fair exchanges to the mutual benefit of all parties. That is not this deal.

Gagnon of Yarmouth is the chief executive officer of the Maine Policy Institute, a free market policy think tank based in Portland. A Hampden native, he previously served as a senior strategist for the Republican Governors Association in Washington, D.C.