Meeting LD 1s Tax Burden Goal

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Meeting LD 1s Tax Burden Goal

• Richard Silkman
• January 2008

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Maines Goal is to Lower its State and Local Tax
burden Ranking to the Middle One-Third of States
by 2015
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State/Local Tax Burden 2007 Tax Foundation
Ranking/US Dept of Commerce Statistics
The difference of 544 per capita multiplied by
Maines population equals 719,168,000
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Maines Ranking is Unfavorable on Important
Economic Measures
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Becoming Average
When You Are an Average Income State, To Achieve
a Tax Burden Comparable to the National Average,
You Must Spend at a Level Comparable to the
National Average.
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So, How Do We Accomplish This
We look to where Maines spending is out of line
with the National Average and adopt policies that
move us into line with the National Average. The
Road Map is pretty clear
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Education
Represents 47 of General Fund Spending and 45
of all Budget Spending

• 2 billion a year
• 200,000 students (44th in US)
• 11,285 per pupil cost (8th in US)

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What If ?

• Maine Had Fewer School Districts
• 286 school districts
• 679 students per district
• Southern Maine average 2,000
• Washington County average 518
• National average 3,000
• Estimated Administrative Savings of 40 Million a
  year.

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First We optimize school district size through
consolidation - 40 M
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What If ?

• Maines Student-Teacher Ratio was at the
  National Average
• Maine 11.9 (4th highest in US)
• US Median 14.1
• Increasing the Student-Teacher Ratio to the
  national average would save 117 million a year.

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Second We increase student-teacher ratios to
National Average - 120 M
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What If?

• Special Education Identification Changed to
  National Average
• Maine 18.3 of all children
• US Average 13.9
• 7,000 per identified student
• 17 of all K-12 spending
• Growing at twice the rate of regular ed spending
• At national average identification rate savings
  of 63 million a year

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Third We reduce Special Education Enrollment to
National Average - 60 M
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Medicaid
Represents 32 of General Fund Spending and 45
of all Budget Spending

• 2 billion a year on MaineCare
• 21 Federal-State match in 2004
• Maine spent 28.2 of its total budget on Medicaid
  (5th in US)
• 23 of Mainers receive Medicaid (top 5 in US)

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What If?

• Maine Had Fewer Medicaid Recipients
• Maine 23 of population (5th US)
• US Average 19
• Almost 21 higher than US average
• If Medicaid enrollment fell to the national
  average, savings would be about 500 million a
  year or about 167 million for Mainers.

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Fourth We reduce Medicaid Eligibility to
National Average - 170 M
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What If?

• Medicaid Spending per Recipient Dropped
• Maine 8,000
• US Average 4,300
• Almost 2 TIMES higher than US average
• If Maine spent at the national average, savings
  would be about 900 million a year or about 300
  million for Mainers.

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Fifth We reduce Medicaid Spending per recipient
to the National Average - 300 M
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If we do these things, as well as focus on other
areas such as Corrections, where Maines spending
is out of line with national norms, we can bring
our tax burden into line with the tax burdens of
other rural states, which will help Maine become
more competitive and stimulate economic activity
and job growth.
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[phone]www.mpsrg.orginfo_at_mpsrg.orgP.O.
Box 143 Portland ME 04112