The Trouble with Shorthand and Shutdowns

The debate over the budget — sometimes between Republicans and Democrats, other times between the Executive and Legislative branches — is heated, to say the least.  I predicted last week on how I expect it would end, but the BDN political reporters found an interesting development.

Representative Heather Sirocki (R-Scarborough) sent the Attorney General a letter asking about a “continuing resolution.”  The AG responded saying, effectively, her question does not warrant an answer because the budget is going into effect.  I think Rep. Sirocki’s questions deserve a closer look.

This scenario played out in 2013 as well, albeit with a different balance of power.  Gov. LePage was supported by a majority of Republicans in both the House and Senate — the override consisted of a minority of the minority party joining with the Democrats.  The spectre of “shutdown” was brought up then as now, which leads me to the topic of “shorthand.”

The State House press corps, like reporters everywhere, try to convey the largest amount of information in the fewest words possible.  Politicians attempt to liken any proposal or event to something else in an effort to make things understandable to the general public.  Both of these lead to the use of shorthand in politics.

Unfortunately, there are two terms continually used concerning state finances which do not quite convey the full picture: “balanced budget” and “continuing resolution.”

Balanced Budget

If you read any press coverage of the state budget, you will likely see it stated that Maine has a constitutional “balanced budget” requirement.  Convenient shorthand, but it misses some nuance.

The Constitution actually provides that the State may not go more than $2,000,000 into debt without a voter referendum.  There are some exceptions to this in the case of war or insurrection, but I do not believe even the most partisan Mainer believes we are there yet.*

It also provides that the State may float some checks through temporary loans to be paid via expected tax revenues in a fiscal year, recognizing that the timing of income and expenses may not always directly match.

Lastly, the Constitution indicates bond proceeds may not be used to pay “current expenditures.”  It requires the Legislature to enact a law putting this prohibition into effect (which they haven’t done).  Nevertheless, the principal is clear and that provision is likely self-executing.

Taken together, the Constitution prohibits the Legislature from deficit spending more than $2,000,000 in the aggregate without voter approval, and any such deficit spending or bonding may not be used on current expenditures.

Shorthand, this means we must have a “balanced budget” requirement.  But more precisely, it merely means the Legislature cannot spend more than they are expected to take in during a fiscal year — nothing stops them from spending less.  Which leads me to the second shorthand term.

Continuing Resolution

There was a big battle in 2013 over a proposal by the Governor to introduce a “continuing resolution” to avoid a shutdown while negotiations proceeded on the budget.  Janet Mills opined that it was not permissible and her argument carried the day, and she appended the same letter in response to Rep. Sirocki’s inquiry.

Truth be told, AG Mills was right…if you used a literal understanding of the term “continuing resolution.”  Congress’ bills effectively authorize the federal Executive branch to keep spending at the previous year’s levels through verbiage alone.  The Maine Constitution requires appropriations or allocations — dollar amounts — prior to the draw of any funds on the treasury.

However, Gov. LePage used the term “continuing resolution” as shorthand for a temporary spending measure designed to keep government open.  Effectively, this would have been a budget that intentionally funded only a small portion of the expected expenditures during the year.  Programs would have been underfunded, which the legislature has done for years.  See, e.g., 55% to schools, revenue sharing, annual shortfalls in DHHS.

But the charge that such a measure was “against the law” is disingenuous — we call legislators “lawmakers” for a reason.  The only requirement for a biennial budget in Maine is found in statute.  And, as much as we might wish it to be so, it is not illegal for the Legislature to make new laws or amend existing ones.

If the Legislature passed a budget spending only 1/12th of what is necessary to operate government for an upcoming fiscal year and said it was permissible “notwithstanding” the statute, then that becomes the law.

The remainder of the objections raised by the Attorney General in 2013 were policy driven: a temporary spending measure creates uncertainty, other organizations cannot budget, et cetera.  Those arguments have some merit.  However, to echo Chief Justice Roberts, the Maine Constitution doesn’t have a “good idea clause.”  If the only prohibition to a given course of action is statutory, then a legislature and governor can proceed by changing the law.

I bring all of this up now because I believe Rep. Sirocki’s questions deserve answers.  This may all be moot, if the Legislature overrides the Governor’s expected veto of the budget.  But we deserve discussions based in fact.  If a short term budget is a bad idea, then let’s have that debate on the merits and let things fall where they may.

 *There are also some provisions around revenue bonds and mortgage insurance, but those do not come into play here.

Michael Cianchette

About Michael Cianchette

Michael Cianchette was the chief counsel to Gov. Paul LePage from 2012-2013 and deputy counsel from 2011-2012. A Navy reservist, he was deployed to Afghanistan from 2013-2014 as a trainer and adviser to the Afghan National Police. He is an alumnus of the Leadership Maine program and holds a BA in economics and political science from Boston College along with a JD and an MBA from Suffolk University. He works as in-house counsel and financial manager for a number of affiliated companies in southern Maine.