So pretty, so plastic BY AL DIAMON

The worst thing about the new state budget is not that it borrows money to pay for current operating costs. The feds have been doing that for decades, and the only negative consequence has been a few trillion dollars of debt that nobody has any idea how we’ll ever pay off. Now that the governor and Legislature have found a way to work the same scam, we’re never going to have to worry about running short of cash again. At least in our lifetimes.

Nor is it a big deal that the new budget is, technically speaking, unconstitutional. Maine’s biennial spending plan is supposed to be balanced, with actual revenues covering actual expenditures. This budget comes up $450 million short on the revenue side. To bridge that little gap, a special sub-committee of two Democrats, state Senator John Martin of Eagle Lake and state Representative Janet Mills of Farmington, and two Republicans, state Senator Richard Nass of Acton and state Representative Sawin Millett of Waterford, came up with the idea of borrowing the money by selling special revenue bonds. Unlike regular bonds, these things don’t have to be approved by voters, who might have been less than enthusiastic about endorsing the kind of financial management that made such a success of WorldCom.

As noted above, that’s hardly the worst thing about this budget. After all, the state has a long history of balancing the books using gimmicks, ranging from Republican Governor John McKernan’s shell games in the early ’90s (many of which, coincidentally, were developed by Millett) to Democratic Governor John Baldacci’s sale of the state’s wholesale liquor business two years ago. (One big difference between the two governors’ decisions to play fiscally fast and loose: McKernan had a real crisis, with state revenues actually declining for the first time in decades. In Baldacci’s case, revenues are growing, but not as fast as spending.)

What’s wrong with the new budget is that it doesn’t differ from the governor’s original spending plan by as much as Michelob Ultra differs from carbonated water with a trace of yellow food coloring.

In January, Baldacci proposed selling off the next decade’s worth of state lottery profits for $250 million in up-front money. Lots of highly principled legislators declared they’d never vote for such an irresponsible proposal.

Guess where most of the cash to pay for the $450 million in revenue bonds is coming from. Hint: It rhymes with dottery. That’ll take care of all profits from that source for the next 14 years or so. It’ll also wipe out the integrity of those legislators who voted for the budget after saying they’d never support the lottery sell-off.

It would be easy to blame Democrats for this mess. So I will.

But Republicans, even those who refused to support this spending plan, also deserve a sizable share of the responsibility.

Here’s why. The Dems who opposed Baldacci’s budget at least had the good graces to propose an alternative: They wanted to raise taxes. (I didn’t say it was an intelligent alternative, although it would be difficult to argue it was any stupider than selling off the lottery.)

But members of the GOP who didn’t like the governor’s numbers offered nothing in the way of a competing plan. Except they wanted to cut spending.

Somewhere. Like, maybe, in that part of state government no one uses.

Republicans promised they’d come up with specifics if they could just have a little more time. Like until July or August.

One GOP operative went so far as to claim it wasn’t the responsibility of the opposition to propose detailed cuts. Besides, he admitted, "Saying you want to eliminate something just alienates voters."

Another Republican was infuriated when it was suggested the state could save up to $10 million over the next two years by abolishing the Clean Election Fund. "That’s less money than [the Department of Health and Human Services] misplaces in a week," he sputtered. True, but if you save $10 million here and $10 million there, pretty soon you’re talking real money.

It remains to be seen if this budget causes the bond-rating agencies to downgrade Maine’s borrowing capabilities, although that seems likely. If they do, we’ll pay more interest on those revenue bonds, which will throw state spending out of balance.

No problem. Just haul out the credit card, and charge the extra to another revenue bond.

Think that’s absurd? Think again.

By 2007, borrowing to pay for borrowing will be standard operating procedure in state budgeting. That’s because whoever has the misfortune of being elected governor in 2006 will face an immediate revenue shortfall that’s currently projected to be in the neighborhood of $650 million. Since there won’t be any more liquor or lottery revenues to sell, much of that gap will have to be covered by new bonds.

Deficit spending will have become the norm in Augusta.

Which means we haven’t yet seen the worst thing about this budget.

But our grandkids will.

Spend some time (but no money) emailing me at ishmaelia@gwi.net