🔒Looking deeper

Panel orders study of tech office

• IT agency focus of various complaints
• OPEGA to conduct “major study”

The Legislature’s Government Oversight Committee has voted unanimously to study the state Office of Information Technology following complaints about its cost and operations.

“We have heard a lot of complaints from other agencies and there are many questions we need to get answers to,” said Sen. Roger Katz, R-Augusta, co-chairman of the committee. He offered a motion to skip the committee’s usual assessment process and place the study directly on the work list of the Office of Program Evaluation and Government Accountability.

Rep. David Burns, R-Whiting, co-chairman of the panel, said OIT was created in 2005 as a way to centralize computer purchases and the maintenance of information technology systems, and to save money. He said there have been comments from many agencies across state government that those goals have not been met. “This is an agency where if things go right, it can be very good for the state and if it goes bad, it is going to be very bad for the state,” Burns said.

Sen. Bill Diamond, D-Windham, said he has several concerns about the way OIT is managed, stemming from his service as co-chairman of the appropriations committee in the last two-year session of the Legislature. “If any agency needs review, this is one that must,” he said. Diamond said the consolidation of all information technology services into one agency was supposed to improve efficiency and eliminate duplication.

In an interview last month, Steve Giguere, director of the Office of Weights and Measures, said he was “frustrated” in his dealings with OIT by the limited usefulness of the record-keeping system that stores his agency’s inspection records. “I am told we can get some information if we have a programmer at OIT do it,” he said. “I am not an IT person, but I don’t know why it is so difficult.”

OPEGA Director Beth Ashcroft said the OIT budget is over $72 million a year and that IT has become crucial to government operations. Her office may have to contract for consultants to help with the study and will have a proposed budget for the study next month, she said. “This is a significant agency and this will be a major study for us,” she said.

The study has the support of the Department of Finance and Administration, which it falls under. Deputy Commissioner David Emery said he has been examining how the agency operates. OIT manages the state phone system, among other technologies, and Emery said the billing system is so complex and confusing that the state has hired an outside consultant to develop a new one. “I see this proposed OPEGA study as being one of the most useful contributions to this problem that I could recommend,” he said.

Business court set to restart

• Staff available to handle cases
• New technology to speed process

After going on hiatus due to state budget cuts over a year ago, the specialized court set up to deal with complex business disputes should be operating again by the first of the year, according to Chief Justice Leigh Saufley.

“I would say it was a period of 12 to 18 months where we just did not have the resources to keep the business court going,” she said. “We now have the staff available and the judges available to handle cases and rejuvenate the business court.”

Saufley said the goal of the Business and Consumer Court is to transfer particularly complex cases to experienced judges to reduce the time it takes to resolve those cases and the costs involved. “We are doing everything we can to support both the Legislature and the governor in their goal of an expedited response to business cases to help create jobs,” she said.

The court always had strong support from the business community and lawyers that handle the cases, but as the economy slumped and went into recession, the Legislature reduced court funding. It first opened in 2007 with plans for two judges and four support staff, but never achieved that goal. The “reconstituted” business court will be managed by judges J. John Nivison and Andrew Horton, as well as two clerks, out of Portland, although cases may be tried anywhere in the state. Other judges will handle cases if scheduling permits.

The National Center for State Courts reports that the number of business courts has increased from three in 1993 to more than 40 in 2010. Those specialized courts are in various types of jurisdictions in 22 of the states.

Saufley said the court will make use of video conferencing and a simplified electronic filing system, which allows filings by email to speed up the process. A study done by the court indicates that the average business court case involves more than 13 parties, she said.

Corporate taxes buoy revenues

• $12.5M above expectations for Q1
• Individual income tax falling short

After the first quarter of the budget year, state revenues are in the black by $5.9 million, boosted by corporate profits continuing to come in far higher than projected.

“The first quarter has recovered from the July revenue picture that started off under estimates,” said Finance Commissioner Sawin Millett. “The concerns we had about July appear to have been a timing issue and in August and September we saw individual [income tax] returns above estimates.”

He is concerned that after the first three months of the budget year, individual income tax revenue has not made up for its poor start, with revenues $5.7 million below projections for the quarter. The state is in the black because corporate income taxes are $12.5 million above estimates for the first three months.

The corporate income tax has been a major factor over the last year in bringing in dollars above expectations, Millett said. The revenue forecasting committee has made adjustments over the year to increase projections.

Millett said the sales tax, just 3% above projections, is a better measure of economic activity. “The August sales taxes for meals and lodging are just marginally above what they were a year ago,” he said.

Sen. Richard Rosen, R-Bucksport, co-chairman of the appropriations committee and a clothing store owner, said he shares Millett’s view that the corporate income tax primarily reflects the health of large corporations. “Most businesses in Maine are pass-through entities and show up on the individual income tax,” he said. “That is yet to be positive for this year.”

Rosen said an indication of the impact of the recession and the slow recovery is that the sales tax is projected to total less this year than in 2007. “As grateful as I am for the corporate tax that brings us into a positive position for this first quarter, I am still concerned we are not seeing the job growth we need.”

“Corporations are doing well,” said Rep. Peggy Rotundo, D-Lewiston, the lead Democrat on the committee, “but that wealth is not being translated into jobs and that is really slowing the recovery.”

Mal Leary runs Capitol News Service in Augusta. He can be reached at editorial@mainebiz.biz. Read more of Mal’s columns here.