Power grab
LePage pushes labor changes
- Worker misclassification group nixed
- Legislation would alter definition of ‘employee’
Gov. Paul LePage has abolished a task force studying employee misclassification and plans to submit legislation that would require Maine to adopt the federal definition of an employee to streamline varying state standards.
“What they have been working on would not contribute to the change I am proposing,” he said of the task force. “The whole point is to get one definition for everybody.”
LePage said he has asked his staff to draft legislation to replace the varying standards in Maine law for defining employees, which differ for income tax purposes, unemployment and workers compensation coverage. “We will be submitting legislation to make some remedies to that and make it consistent so that all agencies and all businesses have the same definition,” he said.
LePage said he’s concerned that state definitions and rules have gone “too far” and have virtually eliminated the use of independent contractors by some businesses. “I just think that is a bad direction for the state, so we are going to try to reverse that,” he said.
Sen. Chris Rector, R-Thomaston, co-chair of the Labor, Commerce, Research and Economic Development Committee, said he is far from an expert on the issue, but has listened to several discussions about the problems of defining independent contractors under state law with different agencies using different definitions. “Anything we can do to simplify the ability for employers to unknowingly make mistakes and refine definitions is probably as important as anything we can do as a legislature,” he said.
“Initially, something like this has an appeal, but it could end up having some devastating effects,” said Rep. John Tuttle, D-Sanford, the ranking Democrat on the committee and a former chair of the labor committee. “You have people who say they are independent contractors and they are on a job and are hurt and you find out they have no insurance coverage.”
In the last session of the Legislature, lawmakers worked with the construction industry to come up with rules and training requirements to make sure workers were properly categorized. The resulting law, which tightens the definition of an independent contractor for workers’ compensation purposes, took effect Jan. 1, 2010.
Gov. John Baldacci set up the Employee Misclassification Task Force in 2009 following complaints from union groups that the use of independent contractors and cash payments for work “under the table” was widespread, particularly in building and construction, and undercutting union workers and union employers.
Highway improvements debated
- Lawmakers eye General Fund
- Bill targets auto sales tax revenue
The backlog of needed road repairs and rebuilding in Maine continues to grow and members of the Legislature’s transportation committee are needling their counterparts in appropriations for more money from the state’s General Fund.
“I think it may have been mission impossible in the previous administration,” said Rep. Rich Cebra, R-Naples, House co-chairman of the transportation committee. “But I think the priorities of the state of Maine, of state government will be different than they have been in the last 16 years.”
The backlog will only grow without additional resources as the cost of fixing roads continues to increase and revenues from the gas tax decline with more fuel-efficient vehicles, Cebra said. “I have a bill in that would shift the sales tax on cars and parts to the highway fund,” he said. “No, that won’t solve the problem, but it is a start.”
That shift would bring in an additional $40 million for the highway fund. Sen. Bill Diamond, D-Windham, the Democratic senator on the panel and former co-chair of appropriations committee, said while highways need a higher spending priority, he doubts Cebra’s proposal will gain much support. “Going to the General Fund, when you cut it by $800 million last year and I suspect another $800 million this year, is an unrealistic expectation,” he said.
Sen. Ron Collins, R-Wells, agreed that the General Fund needs to contribute more but he acknowledged simply shifting revenues will prove a hard battle. First, the Department of Transportation’s budget must be scrutinized for efficiencies, he said. “We need to look at where we are spending money and if that is a priority,” Collins said. He said the Maine State Ferry Service should be paid for through the General Fund and funding for the State Police should be changed.
Sen. Richard Rosen, R-Bucksport, co-chairman of the appropriations committee, said there will be “hundreds of millions” of dollars in cuts needed to keep the budget within expected revenues. “There has been a trend to provide some support for the highway fund from the General Fund and I think you will see that continue,” he said. That assistance has come in the form of bonds for road and bridge repairs paid for through the General Fund, such as a $24.8 million bond voters approved last June.
PUC chair: No cheap power options
- New sources decades out
- Cashman to return to private sector
One of the most common complaints at Gov. Paul LePage’s “red tape audit” meetings has been the high cost of electricity. But the retiring chairman of the Public Utilities Commission, Jack Cashman, says there are no quick and easy ways to reduce power costs.
“There isn’t a source for electricity that I know of that is going to be developed that is going to be tremendously lower than the going rate for electricity,” he said. “If you are looking for a magic bullet of a new development for electricity that we can sign a contract with, I don’t know what it will be.”
LePage has said he’ll consider any source of energy that can provide 6-cent power to the state of Maine, but Cashman said there is no such source on the horizon. Maine consumers, both residential and business, are benefiting from the relatively low cost of natural gas, which is the source for most electricity sold in the state, Cashman said. Other much-discussed sources of power will take a long time to build and are more expensive than today’s prices, he said. “If you look at nuclear, it will take 20 years or longer to get a plant permitted and licensed and built, and it will not be cheap power.”
While Hydro Quebec and other hydro power facilities are producing electricity at a relatively low cost, they’re not selling it cheaply. “Hydro Quebec and NB Power both have the ability to produce power at reasonable rates; they also are not philanthropic,” Cashman said. “They understand what profit is and sell their power at going rates.”
Cashman also told members of the committee that he will not seek reappointment when his term runs out in the spring, as he plans to return to the private sector. A former real estate developer, he served as commissioner of the Department of Economic and Community Development and as a senior policy adviser in Gov. John Baldacci’s administration.
Mal Leary runs Capitol News Service in Augusta. He can be reached at editorial@mainebiz.biz. Read more of Mal’s columns here.
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