Delay tax breaks for the wealthy to pay budget debt say Maine lawmakers


May 30, 2013

Sen. President Justin Alfond at a Capitol press conference. photo by Morgan Rogers

Democrats urged Republicans to delay tax breaks for the wealthy to help balance the budget and avoid property tax hikes. The unfunded tax breaks, passed two years ago, were championed by Governor Paul LePage and the Republican-controlled Legislature, and mostly benefit the top 2 percent of Mainers.

“In order to pay for a tax break that largely benefits the wealthy, Governor LePage’s budget increases property taxes on the middle class and working people, on seniors and small businesses, on homeowners and renters,” said Speaker Mark Eves. “Putting these tax breaks for the wealthy on hold is the responsible option, we can’t just pass the buck.”

More than 60 towns and school districts have signed resolutions against the LePage budget. The Maine Municipal Association says the LePage budget is a $424 million shift to municipalities and property taxpayers.

Portland’s school district, yesterday, announced it had to cut almost 49 positions because of cost shifting cut backs.“This is regrettable news for our community but, sadly, not unexpected. The Governor’s budget proposes drastic cuts to education,” said Senate President Justin Alfond. “For too long we have asked our schools and teachers to do more with less. This is counterproductive to our collective goal of making our classrooms the best learning environment for our students.”

LePage’s budget cuts $50 million from public schools across Maine, including an additional $28 million shift forcing school districts to pay for the state’s share of teacher retirement costs.

Delaying the entire tax cut, including the income tax and estate tax changes, would restore more than $400 million in revenues. Delaying the tax breaks was recommended by the Taxation Committee after months of public hearings on the budget and tax proposals.

“Now is not the time for tax cuts that we can’t afford. Our economy simply isn’t growing at a pace to be able to afford a tax break that will primarily benefit the wealthy,” said Alfond. “We need a budget that reflects Maine values, and a budget that we can afford. Raising the property taxes of working Mainers to pay for tax cuts for the rich is neither.”

The tax cuts passed in 2011 provides the top one percent, those earning more than $350,000 per year, a tax cut of almost $3,000, while middle income families will see a return of a little more than $100, according to the Maine Center for Economic Policy.

During the press conference, Eves said, “The question before us is not whether we raise taxes or not; but instead, will we raise taxes on working and middle class people, on our seniors and small businesses? Or can we simply agree that right now Maine can’t afford an unfunded tax break for the wealthy?”

The Democratic leaders said the budget can’t be balanced on cuts to programs alone. They urged Republicans and the Governor to consider fair and responsible tax solutions.

The Taxation Committee’s recommendation to delay last year’s tax cuts was sent to the Appropriations and Financial Affairs Committee for inclusion in the two-year budget.