Unraveling the politics behind Augusta’s “Iron Triangle”

By Stephen L. Bowen

It did not get much play in the news when it happened, but in the last week of September, the Small Business Survival Committee (SBSC) released its annual list of the states that are most friendly to small business—Maine ranked as No. 48.

This might be seen as an improvement to some, (we were No. 49 last year), but to many, it is yet another sign, as if one were needed, that the state’s leadership, and the legislature in particular, has yet to come to grips with how hard it is to run a business in Maine.

There comes a point when one has to wonder how it can be that despite overwhelming evidence, Maine is a miserable place to do business. Yet, no major effort to do anything about this has been made on the state level. It’s clear that it is a major problem, so why is nothing done? During the last legislative session, I learned that understanding why Maine’s war on business continues unabated means taking the time to observe how things work in the Statehouse and why.

Augusta is governed by a series of political realities, and the most important of these is that one party, the Democrats, (and the most liberal of Democrats at that) have controlled the legislature almost without a break for the last 30 years. Of course, the consequence of this is that the “World According to the Liberal Democrats” is the status quo in Augusta. Big state government, high taxes and hostility toward business are par for the course, though to their credit, the governor and other moderates in the party have held the line on the worst of it.

Aside from giving the Democrats plenty of time in which to pursue their policies, 30 years in power has allowed them to build a network of power and influence that remains one of the important forces for action, or lack thereof, in the capitol. That network has three main components. Therefore, I have come to call it, “Augusta’s Iron Triangle.”

Side one of the iron triangle is the state agency staff. I don’t know if a poll has been conducted to determine the predominant party affiliation of Maine’s state employees, but it is almost certainly overwhelmingly Democrats. Thirty years of political appointments and union-negotiated job protection would have made this so, and Democrats are probably more philosophically inclined than others to pursue a career in the kind of do-gooderism that has become so much of what the state does these days.

What is important about them is that the agency staff does not simply do the bidding of your elected leadership—it influences it. For instance, at budget time, agency heads are to produce their own budgets to present to committees. Most pass without comment, and thus, state agencies set their own priorities, staffing and funding. They are the true power brokers in Augusta and keepers of the status quo.

Side two of the triangle is the non-profit social service providers. Who is the most powerful lobby in Augusta? You might be surprised to learn that it is not labor unions or special interest groups of one kind or another. The group that exercises the most influence in the Statehouse is a loose affiliation of non-profit, social service agencies. With their innocuous sounding names (the alliance for this, the coalition for that), their sizable tax-free endowments and seemingly few demands on time, these folks are a constant presence in the Statehouse, pushing for enactment or expansion of any number of dazzlingly expensive programs to fix one social problem or another. Not coincidentally, they are often contracted by state agencies to provide these social services, and thus have a cozy relationship with agency staff.

Side three of the triangle is the Democrats in the legislature, the vast majority of whom come from the non-profit social service industry, the government or organized labor. Of the 30 business owners in the House, for instance, only five are Democrats. So, with social service or government backgrounds, Democrats in the legislature are inclined to work hand in hand with the nonprofits, inventing more work for them in the name of providing some needed service to the people.

The connection, then, between the three sides of the triangle is the almost seamless movement between them of people, politics and policy. Do-gooding Democrats make a name for themselves working for some nonprofit, build a network among other nonprofits then become elected to the legislature. They then focus their energy and majority power on expanding the very social programs from which they made their living before winning the election. Once finished in the legislature, they get a plum appointment with a sympathetic state agency, ideally the very agency that administers the program they legislated, and which has oversight over the nonprofits that provide that service for the state. Cozy, huh?

Even more problematic though, is the reigning philosophy of the triangle, which goes a long way toward explaining why the state is so rough for small business. The abiding belief is that people are eternal victims of the “rich and powerful” and that they are unable to help themselves without the kindnesses of the state. Greedy businesses are driving up costs for everything from health care to housing. Employers are not to be trusted to treat workers fairly, and, therefore, must have aggressive regulation forced upon them. Profit motive is morally suspect, so free enterprise must be discouraged where it is practiced, and removed entirely from the provision of things like medical care and education, without regard to performance. In sum, if it is good for business, it is bad for Maine.

Of course, this is not a universally held set of beliefs among Democrats in the legislature, and it is important to do the kind of voting analysis done, for instance, by the Maine Economic Research Institute to sort out the true business bashers. However, Augusta’s Iron Triangle is there. Built over decades, it is as powerful a force in making Maine hard for business as any other force.

It is statewide as well, which means that the only way to fight it is statewide. Businesses must organize on a state level to target business-hostile legislators and work to boot them out. New leadership can begin policy shifts that make their way slowly through the system and begin to break down the triangle.

With time, business can be safe in Maine. However, only with changes at the top—statewide—will we see a day when the SBSC reports that Maine no longer carries the burden of being one of the worst places in America to run a business. |