Currently showing posts tagged tax proposal LePage

  • Maine's tax reform must give the best deal to middle class and people in need

    Editorial by Rep. Peggy Rotundo, D-Lewiston, the House chair of the Legislature’s Appropriations and Financial Affairs Committee. Editorial first appeared in the Bangor Daily News

    A strong middle class. A solid foundation for our children’s future. A secure retirement for our seniors.

    This is what Democrats are fighting for every day. We believe that if you work hard, you should be able to build a life for your family, put your kids on a pathway to success and expect to age in dignity.

    Here in the State House, this is what we have in mind as we craft legislation, debate policy and build a state budget. Tax conformity is no exception.

    States regularly face the question of tax conformity. The heart of the issue is whether a state wants its tax code to mirror that of the federal government and, if so, by how much.

    A bill that deals with tax conformity is making its way through the Maine Legislature. There’s much to like about tax conformity, including predictability for Maine families and businesses that need to file tax returns in a timely fashion and tax relief for Maine’s small businesses, homeowners, students and teachers who use their own hard-earned money to provide supplies in their classrooms.

    Democrats embrace the parts of the tax conformity bill that help Maine’s middle class grow and thrive. We strongly support the mortgage interest deduction because it helps Mainers become homeowners and establish their financial security, the deductions for higher education costs because they help young Mainers gain the skills to compete in a global economy, and the incentives for small businesses because they help them grow and create jobs in Maine.

    But the tax conformity bill put forward by Gov. Paul LePage isn’t simply about syncing the federal and state tax codes. He has sent the Legislature a proposal that includes an element that needs our careful scrutiny. It’s called the Maine Capital Investment Credit, and it primarily benefits large corporations based outside of Maine. It would cost Maine taxpayers $23 million.

    The Maine Capital Investment Credit is Maine’s version of bonus depreciation. But rather than precisely mirroring the federal program, it is altered in significant ways. These types of programs were originally intended to help the economy during the Great Recession, but it’s not at all clear how effective they truly are. It’s worth noting that no other New England state is adopting a program like this. That ought to give us pause as we decide whether this is the most fiscally responsible use of $23 million of Maine taxpayer money.

    Democrats question whether this is the best use of $23 million. We see need in our classrooms. We know that property tax relief is needed by families, local businesses and seniors whose ability to stay in their homes is threatened by property tax spikes. We know we must also address priorities such as improving services for veterans, boosting economic development through broadband access and combating the drug crisis that is killing five Mainers every week.

    Many school districts across Maine are grappling with the news that the state will be providing them with less support for education. Recently released projections from the state Department of Education indicate that in many local communities, the state share will be dramatically lower for the 2016-17 school year. Maine property taxpayers are facing a total shortfall estimated at $23 million.

    This leaves communities in the position of making cuts in the classroom or having their local property taxpayers pick up a larger portion of the tab.

    Will the education of a community’s children have to suffer? Will young families trying to get established and seniors on fixed incomes see their property taxes go up? Will towns have to cut back on services such as emergency personnel, road maintenance and trash pickup?

    We cannot simply provide a $23 million tax break to large corporate filers headquartered out of state without close scrutiny. That would be an affront to Maine taxpayers — the families, seniors and local businesses that expect us to be working on their behalf.

    If we are going to provide tax relief to businesses, we ought to prioritize the small Maine businessess that form the backbone of our economy. They make up nearly 97 percent of our employers, employ the majority of Maine workers and are committed to Maine communities.

    We will not simply rubber stamp the governor’s proposal as is. We will fight for the best deal for Maine people. We will put Maine first.

  • LePage administration secrecy holds up tax breaks for small businesses, homeowners, students

     Lawmakers on the Taxation Committee on Wednesday tabled Gov. Paul LePage’s $38 million tax conformity package after the administration refused to provide information about how it would pay for the entire plan, which includes a $22 million tax cut to benefit large, out-of-state corporations.

    Finance Commissioner Richard Rosen told committee members that the administration would only share information about funding sources once legislators approve the bill.

    Democrats on the committee support the portions of tax conformity that benefit small businesses, teachers, homeowners and students. Those benefits face unnecessarily delay because the LePage administration will not disclose important details of its plan, which will grant tax breaks to big, out-of-state corporations through a separate section of package.

    Tax conformity will be one of the most consequential pieces of legislation to be considered this session. Meanwhile, the administration has already printed tax forms assuming the Legislature will follow its lead and pass the governor’s conformity plan it its entirety.

    “Only in political la-la-land would a person support politicians who fund $22 million in kickbacks for big corporate filers headquartered out of state without knowing how to pay for it,” said Rep. Adam Goode, D-Bangor, House chair of the Taxation Committee. “It’s particularly frustrating that the LePage administration is holding up tax relief for small businesses, teachers, homeowners and students so it can hide a secret stash of funding.”

    Sen. Nate Libby, D-Lewiston, the lead Senate Democrat on the committee, criticized Commissioner Rosen for saying he wouldn’t reveal the governor’s plans to pay for the tax conformity package until after the committee agreed to pass it.

    “The Taxation Committee isn’t a rubber stamp for anyone, including the governor,” said Sen. Libby. “We have to do our due diligence, and that means we need the information required to make good policy decisions for the people of Maine. The administration can’t hold necessary information and expect us to sign a blank check.”


  • Maine House, Senate set to vote on bipartisan budget deal on June 16th

    By Ramona du Houx

    Democratic and Republican legislative leaders on the evening of June 15th announced a bipartisan budget agreement that will prevent a shutdown of state government.

    Senate President Michael Thibodeau, R-Waldo said, “I believe this budget has something for everyone in Maine. We were sent here to represent them, and I am pleased that we were able to lower their tax burden while at the same time take steps to keep property taxes in check and fund vital state services," said Senate President Michael Thibodeau, R-Waldo. 

    The agreement includes tax cuts, investment in students and workers, property tax relief, and welfare reform. The House and Senate will take up the Appropriations budget bill Tuesday morning, offering House floor amendments to reflect the bipartisan agreement.

    “In divided government, compromise is the only option, ” said Speaker Mark Eves, D-North Berwick. “I'm pleased we've reached an agreement that will grow our economy and improve the lives of Maine families. While no one in our negotiations got everything they wanted, we worked hard to deliver progress for the people of Maine.”

    Compromise is never easy but this is how governing works. In Maine, we can see beyond our differences and find areas of mutual agreement to move our state forward,” said Senate Democratic Leader Justin Alfond of Portland. “This budget invests in our youngest and our oldest, our workers and our retirees, and provides a meaningful tax cut to all Mainers."

    The four leaders have been meeting and working toward agreement since the state’s budget writing committee reported out a budget on June 5.

    “After weeks of tough negotiations we have reached an agreement that we feel moves Maine forward,” said House Republican Leader Ken Fredette of Newport.  

  • GOP gives huge tax breaks to top 1 percent while raising taxes for working Mainers and seniors

    Distributional analysis of Maine Republican and Democratic tax plans

    By Ramona du Houx

    The saga of sorting out the various tax proposals under consideration this year is epic. Yet, simplified, it comes down to two camps with different principles. One wants to strengthen the middleclass, grow jobs, and give a hand up to the working poor. The other wants to give Maine's top 1 percent huge tax breaks. The most recent Republican tax plan increases taxes for working Mainers and seniors while decreasing taxes for the rich. While the Democritic plan lowers property taxes and helps to lower some income taxes.

    When Gov. Paul LePage wrote his extreme tax plan into his budget proposal, he made it harder for lawmakers to sort out the actual two-year budget. LePage’s tax expenditures and breaks projected into the future, which is something a two-year budget is not designed to do.

    Seeing the damaging impact that proposal would have on citizens - as property taxes and sales taxes would certainly rise under LePage’s plan - Democrats revised it making sure middleclass workers and the poor would have “a better deal.”

    In an attempt to sidetrack lawmakers and refocus the media the governor announced his legislation to end income tax. The Tax Committee rejected that.

    Then, after months of work from the Appropriations Committee, the place lawmakers form the budget - the governor gives them a makeover of his original tax plan - at the last minute. Keep in mind adjournment of the legislature is in a matter of weeks. If they don't finish the work, taxpayers will have to pay for their extra time. Something LePage, no doubt, could have had in mind as he tried to ramrod his new plan.

    LePage's tactics are getting old. Even folks in his party are revolting. The following is what the economist Garrett Martin, of the Maine Center of Economic Policy has to say about their proposal:


    Legislative Republicans have released a tax plan that is a bad deal for working Mainers and seniors living on fixed incomes. Based on preliminary analysis the Maine Center for Economic Policy conducted in conjunction with the Institute on Taxation and Economic Policy, Mainers with income less than $57,000 will, on average, receive a tax increase under the Republican plan. That means approximately 60 percent of Maine people will get a tax increase on average if the Republican plan passes.

    The Republican plan is a bad deal. It prioritizes income tax cuts for the wealthy and corporations at the expense of the rest of us. Future impacts will be even worse as the Republican plan shifts more costs to low- and middle-income property taxpayers and it further compromises the state’s capacity to fund our schools, provide for low-income seniors, children, and people with disabilities, and maintain vital public services.

    The Republican plan reflects the discredited theory that income tax cuts will put Maine on the path to prosperity. They won’t. Maintaining public investments in our schools and communities will. And a robust and progressive state income tax is the foundation of such investments. This will not only help secure funding for public investments beneficial to all Maine families and businesses, it will also create a tax system where what the rich and poor pay in state and local taxes as a share of their income is more fair.

    Stay tuned as we release more analysis on the Republican plan. In the meantime, MECEP urges lawmakers on both sides of the aisle to work toward crafting a budget that includes both responsible, fair tax reforms that benefit middle- and low-income families and raises the revenue we need to fund education, health care, and other investments that will improve our economy and create opportunity for all Maine people.

  • Taxation Committee rejects Gov. LePage's unpaid-for proposal to eliminate income tax

    Measure would give huge breaks to the top 1 percent, while gutting education and raising property taxes

    By Ramona du Houx

     The Legislature’s Taxation Committee on Wednesday rejected a proposed Constitutional amendment from Governor Paul LePage to abolish the state’s income tax.

    Independent Rep. Gary Sukeforth of Appleton joined Democrats on the committee in opposing the $1.7 billion unpaid-for proposal.

    “Maine families balance their budgets every day and if they want something, they have to pay for it. Governor LePage and his Republican allies have not said where this $1.7 billion is going to come from,” said House Taxation Committee Chair Adam Goode, D-Bangor. “Voters are not getting the full story. It's reckless. Cutting every cent of K-12 funding would not cover the entire cost of eliminating the income tax. States that have tried this failed experiment have been forced to close schools early.”

    The income tax elimination would force cuts in K-12 and higher education, with the majority of the tax break going to those with incomes greater than $392,000.

    Maine spends close to $1.2 billion on K-12 and higher education and $750 million on health care for children, seniors, and people with disabilities.   Even if the governor cut all state funding for education and half the funding for health care, there still wouldn’t be enough money to cover the cost of eliminating Maine’s income tax.

    In WisconsinKansas, and Louisiana, unpaid for tax cuts for the wealthy have hurt the economy and led to crippling cuts to schools. 

    “The governor’s proposal to eliminate the income tax is more of a political sound bite than a credible proposal. As someone who has worked on bipartisan tax reform for as long as I’ve been in the Legislature, I can say with certainty, that no serious plan would include a gaping hole in our budget,” said Democratic State Senator Nate Libby of Lewiston, who serves on the state’s Taxation Committee. “His proposal would force irresponsible cuts to education and hurt our towns at a magnitude that even he can’t explain how it will be paid for.”

    "We applaud the committee's rejection of this reckless gimmick that would have put funding for schools and other vital services at risk. Repeal of the income tax would create a $1.7 billion hole in future budgets. We could eliminate all state funding for K-12 and higher education and still not realize the savings needed to pay for this fiscally irresponsible proposal. We would have to increase local property taxes by 40 percent to maintain current spending for schools," said the Maine Center for Economic Policy (MECEP) Executive Director Garrett Martin. 

    "Doubling the current sales tax rate still would not generate the revenue needed to balance the state's budget. It's time for legislators to get back to work on a bi-partisan budget that incorporates some of the best ideas from legislative Democrats' A Better Deal for Maine plan and the governor's original budget proposal. We urge them to deliver a budget that includes both responsible, fair tax reforms that benefit middle- and low-income families and raises the revenue we need to fund education, health care, and other investments that will improve our economy and create opportunity for all Maine people."

    The measure will now head to the House and Senate for a vote, where it will need support from two-thirds of the members in order to pass.

    Five reasons why eliminating Maine's income tax is "a bad idea":

    1. It's a huge giveaway to the wealthy. The top 1 percent of Mainers - 7,000 households with incomes greater than $392,000 - will get a $61,000 income tax cut on average  and account for 26 percent of the total amount. Meanwhile, middle-income Mainers - 140,000 households with incomes between $38,000 and $60,000 - will on average get a $900 income tax cut and account for less than 8 percent of the total. Of course, the $900 income tax cut for middle-income Mainers will quickly disappear in the face of property and sales tax increases required to pay for eliminating Maine's income tax. Instead of giving huge tax breaks to the wealthy and large corporations, which eliminating Maine's income tax will do, we should focus on fiscally responsible policies that deliver more value to the middle class.

    2. It jeopardizes funding for schools and other vital servicesIn 2019, the current income tax is expected to generate more than $1.7 billion in revenue. That's money we will use to pay for schools, provide access to health care for seniors and people with disabilities, maintain public safety and critical infrastructure, and deliver other important services. Maine spends close to $1.2 billion on K-12 and higher education and $750 million on health care for children, seniors, and people with disabilities. Even if the governor cut all state funding for education and half the funding for health care, he still wouldn't have enough money to cover the cost of eliminating Maine's income tax. Rather than cut support for schools and other services, we should be calling on the wealthy and corporations to pay their fair share.

    3. It will trigger property tax increases. Reduced funding at the state level for schools and local services merely shifts costs to property taxpayers. This has already begun to happen. For low- and middle-income Mainers, increasing property taxes is a much greater concern than what they pay in income taxes. In addition, relying more on property taxes to fund schools and local services is a recipe for increasing inequality between wealthier and poorer parts of the state.

    4. It will make an unfair tax system even less fairLow- and middle-income Mainers already pay more in state and local taxes per dollar earned than wealthy Mainers. Eliminating the income tax will worsen the situation, particularly as other taxes go up to make up for lost income tax revenue. In fact, states with the least fair tax systems in the country are those that don't have an income tax.

    5. It's a failed prescription for growing Maine's economy. Real-world results and the academic literature lend little support for personal income tax cuts as a strategy for boosting Maine's economy. Since Maine must balance its budget, the legislature must pay for tax cuts by cutting state services or raising other taxes. These actions will offset any benefits of the income tax cut and, even worse, may compromise Maine's future prospects for growth. We can't grow a strong economy when schools and workforce development programs are underfunded, vital communications and transportation infrastructure is absent or decaying, and lack of funding consistently undermines long-term efforts to improve health and protect the environment.
    In a follow-up blog post on May 6, 3 Unsavory Ways to Pay for Eliminating Maine's Income Tax," Martin outlined the options left for legislators to fund government services without the income tax:
    1. Eliminate all state funding for K-12 education and higher education and half of state funding on health care for children, seniors, and people with disabilities. In FY2014, Maine spent close to  $1.2 billion on K-12 and higher education and $750 million on health care for children, seniors, and people with disabilities. Eliminating funding for education and cutting health care funding in half would generate enough savings to cover the cost of eliminating Maine's income tax. If legislators don't want to do this, they could eliminate all state employees and all other departments and agencies funded through the general fund, including the departments of agriculture, attorney general, corrections, economic and community development, judiciary, and inland fisheries and wildlife. But doing so still wouldn't generate enough savings to cover the entire cost of eliminating Maine's income tax.
    2. Raise property taxes by 40%. If lawmakers chose to eliminate state funding for K-12 education property taxpayers would have to fund the entire cost of educating Maine children. At current funding levels that means property taxpayers would have to contribute close to $1 billion toward education. That roughly translates to a 40 percent property tax increase across the state. Of course, communities that are less well-off and currently benefit from a higher share of state aid will incur even more substantial property tax increases to pay for lost state aid.
    3. Raise the sales tax rate to 11.5 percent and the meals and lodging tax rate to 16 percent. Rather than eliminate entire departments in state government or shift education cost to property taxpayers, legislators could instead choose to increase the sales tax to offset the lost income tax revenue. Doing so would require them to more than double both our current 5.5 percent sales tax and our current 8 percent meals and lodging tax.

    There is more detailed MECEP analysis of Maine's current tax and budget deliberations available in the Tax and Budget section of our website, click here.

  • The Fairest Tax - editorial by Neil Rolde

                        By Neil Rolde

                      Maine’s bomb-throwing and wrecker governor, Paul LePage, has a new trick up his sleeve. He now proposes doing away with Maine’s state income tax. Installed in the late 1960s, this major source of State revenue [at least 50 percent of the budget] has provided an irreplaceable foundation of Maine’s economy for more than half a century.

                      What does the bully boy in the Blaine House offer to put in its place? Apparently nothing!

                      Cuts, of course, will have to be made in State services. LePage’s draconian knife no doubt will slash first and foremost at social programs helping the poor, from whose ranks he came but whose plight no longer touches him. Indeed, he seems annoyed by their continued presence. He rose above poverty. Why can’t they? And if they can’t, tant pis, which means “all the worse” for them in French.

                      Actually, doing away with the Maine state income tax has been tried before. Shortly after it was enacted, a “people’s veto” was attempted to nullify its going into law — a statewide referendum forced by petition to repeal what the Legislature had voted.

                      Currently supporters of LePage’s action are arguing that Maine people should have a chance to choose what LePage calls the "fairest tax." But "fairest" is not defined as based on ability to pay but a reversion to reliance on our two major regressive taxes — the sales tax and the property tax. Regressive, by the way, signifies a policy that hits the poor and middle classes — the vast bulk of Maine residents — the hardest. The less you have to pay with, the more you have to pay percentagewise.

                      As for a statewide referendum on this issue, we have been there, done that.

                      And an amazing thing happened back then. All the political pundits and especially the media were crowing that the income tax was doomed. Given the chance to vote on a tax, Mainers would surely get rid of it by an overwhelming margin.

                      Yet, when the votes closed and the ballots were counted, the result was astounding. Not only was the repeal measure defeated, it was crushed by a tally of 3-1, an incredible show of support for what was in fact the fairest tax.

                      In the interests of full disclosure, I was a charter member and spokesman for the anti-repeal organization called FAIR — Fight Against Income Tax Repeal. Our message was clear. If one of the three pillars of the state’s tax structure was removed, Maine would revert to the stagnant backward-looking economy it had suffered since the latter part of the 19th century.

                      Any attempts of necessity to increase the other two taxes — the sales tax and the property tax — to fill the holes left in the state budget were estimated; the cost hikes were breathtaking.

                      Yes, we know that underlying LePage’s lack of discussion of the consequences of his relentless attack on the state’s financial status quo, certain services now available will be ravaged or even totally curtailed. Social services, of course. What else? Education is a major expense but a necessity. Back to the property tax exclusively for that. The environment. Can we afford to despoil it? Tourism is a major industry in Maine. Will vistors flock to see devastated forests and endure polluted waters?

                      I have always admired the common sense and fairmindedness of Maine people.

                      Over the generations, they have generated a wonderful expression I love:

                      “If it ain’t broke, don’t fix it.”

                      When it comes to Governor LePages’s so-called fix, let’s just say No to his rush to make Maine into Mississippi.

  • A Better Deal for Maine comes down to lowering property taxes - strong public backing in Scarborough

    By Ramona du Houx

    Scarborough-area residents and community leaders showed strong support for Democrats’ Better Deal for Maine tax reform plan tonight during the second town hall meeting on the proposal.

    Nearly 150 people attended the town hall at Camp Ketcha to learn more about the proposal, which cuts taxes for the middle class, lowers property taxes for all Maine homeowners and invests in Maine schools, workers and communities.

    “We heard strong support for our plan tonight from everyday Mainers who share our concerns about the Governor’s proposal. Our economy lags behind the nation and our tax system is rigged for those at the very top.  Governor LePage has proposed a budget that will make it worse. Our plan will make it better,” said Speaker Eves. “A Better Deal for Maine grows the economy from the middle out. We reject the trickle-down economics that will only widen the gap between the rich and the poor in our state.”

    It could be said the difference in Governor LePage's tax plan and the Democrats proposal boils down to this: LePage's policies will increase everyone's property taxes while the Democrats proposal will decrease property taxes across the board.

    Speaker Eves and Senate Democratic Leader Justin Alfond announced the Better Deal for Maine plan to counter Governor Paul LePage’s budget. According to a new analysis from the national non-partisan Institute on Taxation and Economic Policy (ITEP) and the Maine Center on Economic Policy, the Better Deal for Maine would cut taxes, on average, for the bottom 95 percent of Maine taxpayers. It would provide a larger tax break than the Governor’s plan, on average, for the bottom 80 percent of Maine taxpayers.

    “Mainers want a better deal for themselves, a better deal for their communities and a better deal for the economy,” said Senator Alfond, D-Portland. “Our plan ensures more Mainers can keep more of their hard-earned money. It decreases the tax burden on Maine’s working and middle-income earners while asking the wealthy, corporations, and out-of-staters to pay their share.”

    The Better Deal for Maine:


    • Puts more money in the pockets of Maine families: Lowers property taxes by $120 million annually for Maine residents by doubling the Homestead Exemption for all Maine homeowners and by increasing the Property Tax Fairness Credit by more than $57 million per year.

    • Invests in Maine's future: Bolsters investment in Maine students, workers and seniors. Increases funding for K-12 education by $20 million per year.

    • Prevents property tax hikes: Increases revenue sharing to $80 million each year for local services like police, fire, and public works, while rejecting the Governor’s new taxes on non-profits.

    • Targets income tax cuts for the middle class: Cuts income taxes by hundreds of dollars for the vast majority of Maine families while asking the wealthiest 5 percent to pay their fair share. Under the Better Deal for Maine, 98 percent of income tax cuts go to the bottom 95 percent of taxpayers. Under the Governor’s plan, 50 percent of the tax break goes to the top 10 percent.

    • Is fiscally responsible: Unlike the Governor’s budget, the Better Deal for Maine is fully paid for now and into the future.


    Democratic leaders held their first town hall meeting on the Better Deal for Maine last Wednesday in Bangor with more than 100 people and held a tele-town hall on Thursday with more than 7,000 participants.







    • Under the Better Deal, Scarborough will see a 16 percent increase in funding for local schools compared with the Governor’s budget.Under Better Deal,  Scarborough schools get $616,971 more for GPA.  

    • The Governor also plans to eliminate Revenue Sharing, another hit to property taxpayers. Getting rid of Revenue Sharing is a $977,200 million hit to the city of Scarborough

    • Under the Better Deal, the city of Scarborough gets nearly $1 million  more funding for local fire, police and public works




    • Under the Better Deal, Portland will see a 8.8 percent increase in funding for local schools compared with the Governor’s budget. Under Better Deal, Portland schools get $1,322,575 more for GPA

    • The Governor also plans to eliminate Revenue Sharing, another hit to property taxpayers. Getting rid of Revenue Sharing is a $5,078,430 million hit to the city of Portland

    • Under the Better Deal,  the city of Portland gets nearly $5,078,430 more funding for local fire, police and public works


    South Portland


    • Under the Better Deal,  South Portland will see an increase of 11.9 percent in funding for local schools compared with the Governor’s budget. Under Better Deal,  South Portland schools get $616,491 more for GPA.

    • The Governor also plans to eliminate Revenue Sharing, another hit to property taxpayers. Getting rid of Revenue Sharing is a $1,587,900 million hit to the city of South Portland

    • Under the Better Deal,  the city of South Portland  gets nearly $1,587,900 more funding for local fire, police and public works


    Cape Elizabeth


    • Under the Better Deal, Cape Elizabeth will see a 9.9 increase in funding for local schools compared with the Governor’s budget. Under Better Deal,  Cape Elizabeth schools get $295,244 more for GPA.

    • The Governor also plans to eliminate Revenue Sharing, another hit to property taxpayers. Getting rid of Revenue Sharing is a $553,191 million hit to the city of Cape Elizabeth

    • Under the Better Deal,  the city of Cape Elizabeth  gets nearly $553,191 more funding for local fire, police and public works




    • Under the Better Deal, Gorham will see an increase of 1.4 percent in funding for local schools compared with the Governor’s budget.Under Better Deal,  Gorham schools get $248,416 more for GPA.

    • The Governor also plans to eliminate Revenue Sharing, another hit to property taxpayers. Getting rid of Revenue Sharing is a $920,951 million hit to the city of Gorham

    • Under the Better Deal, the city of Gorham gets nearly $920,951 more funding for local fire, police and public works




    • Under the Better Deal, Westbrook will see a 2.2 percent increase in funding for local schools compared with the Governor’s budget.Under Better Deal, Westbrook schools get $317,390 more for GPA.  

    • The Governor also plans to eliminate Revenue Sharing, another hit to property taxpayers. Getting rid of Revenue Sharing is a $2.3 million hit to the city of Westbrook

    • Under the Better Deal, the city of Westbrook gets nearly $1.2 million more funding for local fire, police and public works.

  • Democartic Tax Deal for Maine is fiscally sound, politically sophisticated and true to core values

    Since Gov. LePage’s first election, Maine Democrats have been throwing from their back foot, unable to out-message or out-maneuver the governor and championing policies that failed to resonate with Maine’s working-class voters.

    After last November’s elections, I noted, “You cannot look at the electoral map without concluding that working-class voters lost faith with Democrats up and down the state, relegating them to the party of Greater Portland, the gold coast and a smattering of inland communities.”

    But last Thursday the Democrats finally found their footing and powerfully re-inserted themselves into this Legislature’s pre-eminent policy debate – tax reform – by offering their aptly named Better Deal for Maine.

    I’ve written favorably about the governor’s tax reform proposal in the past, noting, among other things, that it initiated an earnest and overdue dialogue about wholesale tax reform and modernization. I’ve also critiqued its reliance on sales and, more importantly, property tax increases and the $300 million hole it blows in the state budget when fully implemented.

    Democrats and progressive groups also correctly observed that the bulk of the governor’s tax relief was directed toward the wealthiest among us, providing more than $10,000 in relief to those earning $400,000 a year, compared with $145 for Mainers earning $40,000.

    Yes, the governor admirably proposes to eliminate income taxes for a family of four making less than $48,000 per year, but we can all agree that remaining swath of Maine’s middle income families – many of whom struggle daily to make ends meet – are more desperately in need of a tax cut than the top 1 percent.

    The Democrats’ plan delivers 98 percent of tax relief to the bottom 95 percent of Maine families while putting more money in their pockets than the governor’s deal does. The Better Deal for Maine is also balanced, neither leaving a multimillion-dollar budget hole for future Legislatures nor necessitating massive cuts to education and social service programs in the out years.

    What’s more, the Democrats’ proposal isn’t just smart policy – it’s also smart politics. The gap between rich and poor has grown at a faster rate in the United States than in any other developed country, with the top 1 percent capturing 95 percent of post-recession growth (since 2009), while 90 percent of Americans became poorer.

    This issue of income inequality is now such a potent, bipartisan political issue that Republican presidential contenders – from Jeb Bush to Ted Cruz – are deploying populist economic rhetoric nearly identical to that of President Obama and Sen. Elizabeth Warren.

    So Republican legislators must decide not only whether they’ll move a significant piece of tax reform legislation, but also if they’ll prioritize the economic interests of the vast majority of their lower- and middle-class constituents. Given the populist economic messages and policies likely to dominate the 2016 contests, the electoral consequences of that decision could be immense.

    The Democrats also shrewdly incorporated – and in some cases improved upon – several of the best elements of the governor’s plan, including the elimination of the sales tax exemption on services, the creation a refundable sales tax credit for low-income filers and doubling the homestead exemption for all resident homeowners, rather than simply seniors as LePage proposed.

    The Democrats also understood that it’s property taxes, not income taxes, that low- and middle-income Mainers feel most acutely. Under LePage’s plan, municipalities would lose $250 million in revenue sharing over two years, while also absorbing more education costs. Rather than relying on local taxpayers to make up that difference in higher property taxes, the Democrats’ plan actually increases municipal revenue sharing and provides $20 million more in school aid.

    But the most politically cunning element of the Better Deal is Democrats’ rejection of the governor’s plan to raise the sales tax rate from 5.5 percent to 6.5 percent. Raising sales taxes – or any taxes, for that matter – is an anathema to legislative Republicans. And now it’s LePage, not Democrats, calling for its increase.

    Yes, the Democrats’ plan increases revenue in 2016 by $100 million (compared to LePage’s $44 million), but they smartly left that money unappropriated and on the bargaining table. That leaves a lot of cushion for striking deals and potentially directing those funds toward Republican priorities.

    With two plans now on the table, the Legislature is within striking distance of a historic, bipartisan tax reform deal. Whether they’re clever enough to compromise and seize the day is yet to be determined. For his part, the governor will almost certainly try to undermine them at every turn.

    The Better Deal for Maine is fiscally sound and politically sophisticated. It’s also true to Democrats’ core values of protecting the most vulnerable and increasing economic opportunities for the middle class. With it, Democrats are finally back in the game.

    Michael Cuzzi manages the Boston and Portland offices of VOX Global, a strategic communications and public affairs firm headquartered in Washington, D.C. 

  • Eves warns LePage cuts that give tax breaks to the wealthy will hurt Maine schools

    State House in Maine. Photo by Ramona du Houx 

     House Speaker Mark Eves is sounding the alarm about the impact of Governor Paul LePage’s budget on school funding and calling for lawmakers to support the Better Deal for Maine plan.

    In addition to bolstering funding for Maine students and public education by $20 million per year, the Better Deal for Maine increases property tax relief for Maine families by $120 million and gives a bigger tax cut to middle and low income families than the Governor’s plan.

    In contrast, Governor LePage’s budget provides 50 percent of the tax cut to the top 10 percent of taxpayers, while leaving a $300 million hole in the budget.  A new analysis of the Governor’s plan in the Bangor Daily News shows that Maine schools will see their budgets cut in half by 2019 if the LePage budget passes.

    In a press conference yesterday, Governor LePage conceded the point:

    “I think there’s a quarter of a billion dollars being wasted in K-12 education alone,” LePage said, according to the Bangor Daily News.  

    Speaker Eves said the Governor’s statement and his budget should be a call to action for parents, students, teachers, and Maine businesses that rely on an educated and skilled workforce.

    “As a father of three young children in our school system, I am extremely worried about the Governor’s plan to gut our schools,” said Eves. “This should be a call to action for every parent in our state.  If you care about the future of our state and our children, pay attention. This is the other half of the story that LePage and his Republican allies don’t want you to know:  Tax cuts for the wealthy and corporations are bankrupting states and crippling education investment across the country.”

    Eves added, “Republican governors across the country have promised that deep income tax cuts, as part of ideologically driven economic programs, would result in strong economic growth and job creation. Yet the policies have not worked. The results are just the opposite -- huge budget holes and cuts to education.”

    In Kansas, Republican Governor Sam Brownback pushed a similar tax plan through a few years ago and this year, he just announced $44 million cut to K-12 and public universities. In fact some schools in Kansas will be forced to close early because of the funding shortfall.

    Louisiana Governor Bobby Jindal similarly forced through huge cuts that were supposed to lead to a booming economy.  However, Louisiana is $1.6 billion in debt and has cut education more than any other state in the country.

    “Governor LePage's plan takes Maine in the wrong direction, and puts us on a path to becoming the next Kansas or Louisiana,” said Eves. “It’s bad news for Maine children, workers and families. That’s why Democrats are fighting for A Better Deal for Maine.”

    Democratic leaders will be holding town hall meetings on the Better Deal for Maine in the coming weeks.

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