Revenge by Referendum

Some Republicans (and some Democrats) have legitimate concerns about both the process by which the budget was passed and its content, but the "people's veto" referendum that may be put forward by a small group of Republican legislators seems vidictive and could be harmful to the state. The group is targetting an unpopular part of the budget, the $450 in borrowing, and if they gather 50,000 signatures in the next 3 months, that measure will face a statewide vote.

The PPH sees a can of worms being opened if a precedent for challenging the budget by referendum is set.

While 50,000 signatures is a high hurdle, for some special interest groups - teacher's unions come to mind - gathering that many signatures would be relatively easy. If the precedent is set to tinker at the ballot box with the Legislature's budget-making decisions, it could lead to fiscal chaos for the state.

Towns and cities unhappy with local aid formulas could veto parts of the budget they don't like. Teachers could try to undo decisions on pensions. And, of course, minority political parties can make trouble at the expense of fiscal stability.

And the AP reports that this action could hurt Maine's bond rating.

"In terms of the rating agencies," [state Treasurer David] Lemoine said uncertainty over a major piece of the two-year budget would make it "very hard to sustain the ratings that we've got."

Interestingly, preserving the state's bond rating was one of the main reasons why some legislators opposed borrowing in the budget in the first place.

Baldacci weighed in on the subject in a BDN article yesterday.

"It's very irresponsible, and they're playing politics now with people's lives," he said. "They're holding Maine's economy hostage by a referendum process. It's not in the citizens' interest, and it does not reflect well on the state, potentially ... It will have a tremendous negative impact at a time when we can least afford it." [...]

"Businesses will be wondering whether the tax cuts are there or not there, and the uncertainty is going to impact on Maine's economy," Baldacci said. "My understanding is that this is supposed to be a people's veto - not a politicians' veto. It's expressly for people to utilize and to create a political process within the referendum process is very irresponsible."

In addition to this campaign, Republicans have also made clear that they will use their objections to the budget as a reason to shoot down the bonding that will soon be proposed by the governor. The bonds would be used to, among other things, improve state infrastructure, preserve public land and provide money to the state university system. Here's an interesting quote from Diamon's column on the subject today:

And Republicans are again preparing to veto any bonding.

"The $450 million gives Republicans cover to say no," said one GOP strategist. "And a lot of them will. They’re really angry about the way the budget was handled."

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