The State of Maine functions on a biennial scheduled budget. The current biennial budget for the financial year 2012-2013 totals $6.1 billion. The state has a debt that is estimated at $17,238,513 which is calculated by totaling the outstanding pension, official debt, various post-employment benefit liabilities, the budget gap and the Unemployment Trust Fund Loans. Regarding economic freedom, the State of Maine is ranked 45th. This effectively shows that State’s economy operations rely on personal choice, minimal government interference and markets are able to balance basic economic questions (Total Appropriations & Allocations All Funds, n.d).
One key appropriation in the Governor’s budget, it recommended that an appropriation of the $6.1 billion be created in the budget for the financial year 201-2013 biennium. This appropriation cuts $203 million in various taxes by reducing the income tax bracket of the top from 8.5% to 7.95%. This eventually leads to the saving of approximately $413 million in common fund spending for the State of Maine’s unfunded pension liability. This also means that state workers will face a three year pension freeze, retirement age for new employees would rise from 62 years to 65 years and there would be a rise of 2% in the workers’ retirement contributions (Total Appropriations & Allocations All Funds, n.d).
I strongly advocate for these appropriations since they will ensure that new employees will have a longer working period, translating to increased revenues. The problem of unemployment has led to people being employed when they are old and ensuring that they work and earn for longer periods. The three year freeze in the pensions will enable the pensioners to recoup higher gains since their money will have gained higher interest during that particular period. The 2% increase in the worker’s contributions ensures that the funds will be invested in high earning dividend instruments and thus