The Smart Money: What if state government shuts down?

Posted Wednesday, June 26, 2013 in Analysis

The Smart Money: What if state government shuts down?

by Gina Hamilton

By now, this column might be academic.  On Wednesday, Maine's legislature is scheduled to meet to vote to override the governor's veto of the bipartisan state budget, which he vetoed on Monday afternoon.

Gov. Paul LePage suggested a short-term continuing budget resolution last week, in a last-ditch attempt to sway some Republican legislators to sustain his veto.  However, under Maine's constitution, such a thing is not legal.  Maine is required to have a balanced, biennial budget passed in odd years by June 30.  Attorney General Janet Mills wrote an opinion on Friday that a continuing resolution would be illegal.

After the subsequent gubernatorial meltdown, aimed at Sen. Troy Jackson, who had informed the governor that the resolution idea was dead in the water, at least three Republican legislators in leadership positions also let the governor know that they would be voting for the bipartisan plan and encouraging fellow members of their caucus to override. 

But what if Maine doesn't have a balanced budget on July 1? What happens then?

In 1991, when Maine had its last budget battle leading to a shutdown, then Gov. John McKernan arranged in advance to keep emergency personnel, police, and corrections employees on the job.  So far, LePage has not spoken to anyone about exceptions to a government shutdown; if he does not, everyone who works for government will be laid off.

State employees would be the first to feel the pain.  Everyone working in every state department, from the Bureau of Motor Vehicles to the State Library to the Labor Department to Maine Revenue Services to the Department of Health and Human Services would be out of a job.  While they would likely receive back wages after the shutdown ends, it puts everyone in a state of limbo that is difficult to deal with, and puts many innocent people at risk.  People in the private sector who have lost a job would be unable to apply for unemployment help.  Foster parents would miss compensation checks.  Children who might be at risk due to neglect and abuse would not be looked after.

And of course, anyone needing any sort of government service would have to wait until human beings were back at their desks.  Need to renew a driver's license? Forget it.  Want to start a business, file a quarterly report, apply for a state permit? You won't be able to do so.  Want to report a toxic spill? Nobody home.

State courts would shut down, leading to long delays in justice across the spectrum.

People who are getting Maine unemployment ... the first 26 weeks of unemployment ... are also out of luck.  It is possible that if Maine shuts down, the feds would help out by taking over temporarily and having Maine repay the payments when the state is 'open for business' for real, but no one is sure how that will work. 

The poor, who may be getting assistance in the form of food stamps and other federal benefits, would technically have them, but because the state administers them, without an agreement to have the feds temporarily administer the programs, they would be useless.  Summer student feeding programs would be halted.

State parks would close.  Highway rest areas would close.  How the Maine Turnpike would handle the shutdown is not clear, but park and ride sites would likely be closed, public transit would be shut down, and maintenance on the turnpike would be halted, as much of that is done by the Department of Transportation.

Hospitals would feel the pinch as MaineCare payments are halted ... again. 

State liquor stores are shut down as inspectors are unavailable.  The same would be true of new restaurants and bars; liquor licenses would be unavailable for the duration.

University of Maine summer programs would be unable to proceed.  Summer school programs in high schools would not take place.  Any adult education programs funded by the state, such as English as a Second Language and high school equivalency test preparation, would not take place.

Work on Maine roads that is paid for or overseen by the Department of Transportation would come to a halt. 

The Legislature and the governor's office would not be exempt.  They would be working toward a resolution without pay into the summer.

And if the resolution is elusive beyond the summer?

Then we reach the realm when schools may not reopen and day care programs may not be available.  Teachers and school administrators would be laid off en masse.

How would all of this affect Maine's economy?  In a word, catastrophically. Our credit rating would likely be downgraded, causing interest rates on any new debt to rise.  Business, which is already wary of moving to Maine because of high energy prices and poor infrastructure, would be even less inclined now. Just the threat of a shutdown causes uncertainty.

The direct hit to the local economy of a long-term shutdown, with the thousands of layoffs in the public sector, those in the private sector that depend on state contracts or funding, and the loss of state welfare funds, would be likely to drive Maine, which is slowly emerging from the recession, back into negative territory. 

So why, one might ask, would anyone even play brinksmanship this way?  There's only one man to ask, and he isn't accepting questions from the media.

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