LPME Guide to the 2017 Referendum Election

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All Mainers will have the opportunity to vote on 4 questions this Tuesday--a casino for York County, expanding Medicaid to low income childless adults, a transportation bond, and a constitutional amendment to modify the accounting treatment of pension losses.  Following is the LPME's official stance on each issue.

Question 1--A Casino for York County:  No

  • The process only grants a license to one company.  It is the opposite of a free market.

Michael Shepherd of the Bangor Daily News wrote earlier this year, “Maine has never had a competitive process to regulate casinos, and (Shawn) Scott essentially pioneered the current piecemeal approach at the ballot.”  A competitive free market is a hallmark of Libertarianism, and it is for this reason that we urge you to reject Question 1.  Its supporters are framing a yes vote as benefiting us all with lowered taxes, better education spending, and promising us that any community would have to approve a casino within its borders before one would open.  This may all be true.  It still obscures the reality that Shawn Scott and his associates are the big winners in this deal.  They get a highly valued commodity in a casino license—his first license in Bangor was sold for $51 million and an unrelated party sold the rights to Oxford for $160 million—without having to make a single actual investment in Maine.  They get these rights simply because they can afford the paid petitioners and advertising necessary to pass a ballot initiative.  It is a perfect example of crony capitalism and should be rejected.

 

Question 2--Medicaid Expansion:  No

  • An admirable goal with suspect funding.

Simply put, we cannot afford a yes vote.  While seeking to provide health care coverage to those with limited resources is an admirable goal, we reject the notion that this can best be done by the government.  The annual outlays for administration to Maine taxpayers is $2.5 million dollars—the equivalent of 12,500 office visits at $200 per visit.  These administrative numbers are after federal matching funds that range from 50% to 75%, making the actual burden on tax payers that much higher.  And that’s before we’ve actually provided care to anyone.  Adding in medical care, the total annual cost to Maine taxpayers is $54,495,000 with a Federal match of $525,000,000.  If you’ve followed the news lately, you’ll know that Medicare expansion has been a favorite target for those looking to repeal or roll back provisions of the ACA.  If they are successful can Maine afford $580 million a year?  We don’t believe so and encourage a no vote.

 

Question 3--Transportation Bond:  No

  • Maine voters have never met a bond they didn’t like.  This transportation bond adds $133,875,000 to our debt with $28,875,000 for interest alone.  Let’s try something different and reject more debt.

 

Question 4--Constitutional Amendment for Pension Losses:  No

  • Further deferring pension funding keeps us from making hard choices about spending.

If you are planning for your own retirement you know that trying to determine how much money to save today to meet your future goals is anything but an exact science.  Such is the case with pension accounting—only multiplied by significantly more people.  As accurate as actuaries can be, there are times when plan performance does not meet expectations.  When this happens it is known as an experience loss and it creates a future obligation (essentially debt) to fund the difference.  In the Maine Public Employee Retirement System (MPERS) the general fund is the means for paying down this debt.  This currently occurs over a 10 year time period.  The proposed constitutional amendment would have this changed to a 20 year period.  This was described by the head of Maine PERS as the equivalent of going from a 15 year mortgage to a 30 year mortgage.  We get a lower payment now in exchange for more total cost to be paid in the future.  The argument is that this smooths out the effects of market volatility, but those “lower” payments also keep us from having to make hard decisions about spending.  The pensions in question are a contractual obligation and should be funded sooner rather than later.  We recommend a no vote.

 


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