Maine House GOP leader doubts Legislature has the ‘courage’ for tax reform

Battle lines are already drawn in another tax reform attempt that lies in wait at the State House for the newly elected Legislature.

Republican Gov. Paul LePage and the executive branch have been working for months on crafting a state government budget proposal for the next two years, which will likely be presented to lawmakers and the public in January. As he has done in the past, LePage will use the budget bill to pursue changes that go far beyond two years.

We won’t know much about the details until the bill — which will commit in excess of $6 billion of tax revenue through 2019 — is presented, but there is no question LePage will lead another attempt to drive down Maine’s top income tax rate, reportedly from 7.15 percent to 5.75 percent. That would blunt the effect of Question 2, which passed narrowly at the ballot box earlier this month and which would place a 3 percent surtax on income over $200,000 a year, on both sides of the equation. Upper earners would pay a lower tax rate on one hand and on the other, income tax revenues to state government would also see a decrease.

LePage and other opponents argue that the surtax would devastate the economy and push professionals like doctors and dentists to other states with lower income tax rates. Proponents of the surtax say the public school system needs an infusion of cash after six austere years under LePage and that the surtax would shift more of the overall tax burden towards upper earners who can afford it.

Cutting taxes has been a priority of LePage’s for years — he favors eliminating the income tax altogether — and Question 2 unraveled much of that work literally overnight. Under LePage, Maine’s top income tax rate has gone from 8.5 percent when he took office to 7.15 percent now. It would essentially be 10.15 percent under Question 2.

You’ve heard all these arguments before. You’ve also seen multiple attempts at big-picture tax reform come from many political corners — including LePage’s — and fail. The poison pill in many of those proposals was a corresponding increase and expansion of the sales tax, which retailers and many Republicans have rejected outright. Here’s your soundtrack.

Here’s another familiar refrain that is likely to echo at the State House in the coming two years: House Republicans in staunch support of the income tax cut and Democrats in oppositions because of the tens of millions of dollars a year the change would cause in state revenues.

Republican House Minority Leader Ken Fredette of Newport said this morning during an interview on WVOM that he’s not hopeful LePage’s tax cut will find its way to enactment. Fredette and his Republican colleagues have aligned themselves with LePage on tax reform in recent years while Senate Republicans have split with the governor and sided with Democrats against the prospect of a government shutdown. 

“In terms of the ability of the Legislature to truly look at tax reform in a meaningful way, it truly hasn’t been done in decades,” said Fredette. “I think [LePage] can propose it but I’m not really certain that the Legislature is going to be able to finish on that. … I don’t know if we have the political courage to do this.”

However, there’s a major difference in the debate this time around: Question 2. It gives a powerful bargaining chip to both sides of the debate, which we at the Daily Brief predict will rage until sometime in late June. By then, the budget will need two-thirds legislative support to go into effect immediately and avoid a state shutdown. There is going to have to be some compromising at the State House for that to happen and with his legacy of reducing Maine’s tax burden on the line, don’t expect it to come from LePage. — Christopher Cousins

Quick hits

  • Feds pump cash into eastern Maine: U.S. Sens. Susan Collins and Angus King have announced a $500,000 economic recovery grant from the U.S. Economic Development Administration to the EAstern Maine Development Corporation. The money, which is targeted at Hancock, Penobscot, Piscataquis and Waldo Counties, is intended to help businesses that have been affected by the closure of manufacturing plants.
  • Your vote counts (seriously): The unsung heroes of Election Day are Maine’s municipal clerks and the legions of employees and volunteers who help tally hundreds of thousands of ballots and make sure voting at the polls go smoothly. That’s a job that started months ago. This year, all of that work has a cloud hanging over it with presidential candidates questioning the legitimacy of the results. The Maine Municipal Association and Maine Secretary of State Matthew Dunlap are fighting back with a series of public service announcements that recognize Maine’s election workers. You might see these PSAs on your social or electronic media soon, but check them out by clicking here if you can’t wait.

Reading list    

No love for artificial trees

My children were very deliberate on Friday when they were at a festival of trees in western Maine. They were given 35 tickets to vote for their favorite trees — which doubled as 35 chances to win the fully decorated trees themselves and the gifts under them, which were contributed by local businesses. They spent a long time considering and making their choices.

Afterwards, my older boy noted that the trees were artificial.

“I really want a real tree,” he said. “I love the way they make the house smell. Do we have to take one of the trees if we win it?”

“What about all the gifts?” I said.

“We could keep the gifts and just give the tree to Nana,” he said.

Sorry, Nana. — Christopher Cousins

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.