Daily Brief: The other LePage budget and the numbers in the first one

If you’re already sick of hearing about the budget, you’re in for a long ride between now and the end of the legislative session. And you won’t like this: there’s another budget bill coming soon.

LePage is preparing a supplemental budget package that conforms Maine to tax breaks renewed by Congress in December, which were retroactive to the beginning of 2014. Because the measure will ensure that Maine’s tax deductions for 2014 are in line with the “tax extender” package just passed by Congress, it needs to be enacted quickly if individuals and businesses in Maine are to benefit in the upcoming tax filing season. LePage told Mal Leary over at MPBN that he’ll support conformity, which will cost tens of millions of dollars midway through a fiscal year, if the state can afford it.  

Chatter around the issue at the State House is turning to speculation about what else the supplemental budget will include. One theory is that a package of budget bills coming from LePage would  include financial adjustments and new initiatives from several state departments. Will LePage and Republicans attach items from their wish list to the conformity bill? Will Democrats? The best time to negotiate is when the stakes are high.

All together: Collins, King and Poliquin

The new Congress has just convened and there is still plenty of time for all hope of progress to be swallowed into a black hole of partisan vitriol. However, three members of Maine’s congressional delegation are demonstrating that, at least for now and at least on paper, they have some common goals.

Republican Sen. Susan Collins, independent Sen. Angus King and rookie Republican U.S. Rep. Bruce Poliquin are pressuring U.S. Trade Representative Michael Froman — which basically means they sent him a joint letter — to stop unfair provincial government subsidies of a paper mill in Port Hawkesbury, Nova Scotia.

King and Collins regularly issue joint statements and share credit for bills advocated for both. That’s noteworthy because elsewhere, senators from the same state can a have a cordial but competitive relationship. Now, it appears Poliquin is showing his willingness to work publicly with his upper-chamber compatriots as well.

Other than perhaps renewing tax breaks before the end of the year they apply to (see above), there probably isn’t more important work that Maine’s congressional delegation could be doing for Maine on the heels of a brutal year for the paper mills and the families they have supported for generations. Just this week, Madison Paper Industries, which operates a mill in Madison, said the Canadian subsidies was a major reason for its recently announced layoffs.

The fight against international trade practices that kill paper-making jobs in Maine dates back decades and the delegation’s letter is the latest of dozens written by past and present politicians from Maine. Their noble but elusive goals aside, the fact that members of the congressional delegation are authoring letters and press releases together is a good sign.

Attaching numbers to LePage’s notions

Since last week, we’ve been hearing about the governor’s tax reform proposal in broad terms, leaving some of the numbers-oriented among us wondering, for example, how much LePage’s proposed income tax cuts will cost and how much his expanded and elevated sales tax will offset that number.

On Wednesday, members of LePage’s finance team presented the public with its best estimates of what the ledger will look like should LePage’s proposal succeed. The figures below reflect the impact that the major elements of LePage’s tax reform package would have in 2018-2019, which is when the plan as it exists today would be in full effect.

  • Phasing out municipal revenue sharing will save the state more than $167 million.
  • Reducing the individual income tax to 5.75 percent, along with proposed sales and property tax fairness credits for low-income Mainers, will reduce state revenues by a whopping $1.2 billion (yes, billion with a B).
  • On the other side of the ledger, expanding the items and services prone to the sales tax and increasing the sales tax rate itself, as LePage proposes, will generate $831 million (we’re back to million with an M) in new state revenue.
  • Repealing the estate tax will cost the state nearly $70 million.
  • Reducing the state’s corporate income tax rate to 6.75 percent carries a price tag of $50 million.
  • Transferring the telecommunications excise tax revenue from the state to local governments will reduce state revenue by about $16.5 million.
  • Repealing the Business Equipment Tax Reimbursement Program in favor of the Business Equipment Tax Exemption Program will save the state about $10.4 million.
  • The proposal to double the homestead exemption for homeowner over age 65 will cost the state $25.5 million.
  • THE BOTTOM LINE is that the overall net tax cut in fiscal year 2019 will be in the neighborhood of $278 million, which is somewhat less than the $300 million figure being thrown around by the governor and his surrogates.

The cutting edge of technology

Maybe you saw the story yesterday about LePage withholding financial orders for the attorney general’s office, one of which would pay for digital x-ray equipment for the medical examiner’s office? Here’s an excerpt from an exceptionally straight-faced and matter-of-fact email from Mark Belserene of the ME’s office, in which he described the advantages of digital:

“This system is approximately 25 years old and part of this building’s original equipment. The process to use a darkroom and several chemicals has become outdated and replaced by digital processing units.”

Stop the presses! Wait, presses?

Christopher Cousins

About Christopher Cousins

Christopher Cousins has worked as a journalist in Maine for more than 15 years and covered state government for numerous media organizations before joining the Bangor Daily News in 2009.