LePage hints at major state budget cuts to cover lower income tax rate

Good morning from Augusta, where Gov. Paul LePage returned to the radio on Tuesday to drop a hint about his upcoming two-year budget proposal: It will propose a cut to income taxes without an increase in the sales tax.

It’s a departure from the Republican governor’s budget proposal nearly two years ago, which proposed an income tax reduction balanced with a sales tax increase. Many Republicans didn’t like the sales tax changes and the Maine Legislature passed a compromise budget over LePage’s veto.

Because of that, LePage told WVOM on Tuesday that he wouldn’t be proposing sales tax changes. However, he said he’s still looking to cut Maine’s top income tax rate of 7.15 percent, which isn’t possible without “major cuts.”

“We had some meetings yesterday — all day, in fact — on budgets and I tell you, it was hard to sleep last night knowing what has to be done in order to protect the economy,” LePage said.

The governor repeated his past assertions that passage of Question 2, which increases the tax rate for income of more than $200,000, and Question 4, which incrementally raises the state’s minimum wage, will devastate Maine’s economy, forcing him to take steps to compensate for the harm he believes the ballot questions will do.

Other than the governor’s piecemeal disclosures, the administration hasn’t disclosed many details of the next budget proposal, which will be unveiled in January after legislators return to Augusta for the new session.

We have seen at least one proposal that could be described as a major cut: This summer, an administration memo leaked saying LePage had a goal to cut Maine’s state workforce to 9,500 from its current level of nearly 12,000 in the budget.

When pressed for clarification on those positions, the administration said it would be reviewing 2,400 limited-period positions with effective end dates, but a review of those positions found that many employees are longtime bureaucrats. Many programs would likely have to be scaled back if a large number of them go.

So, while the politics of a sales tax increase are difficult, it’s hard to see how major cuts in state government would be more palatable to the Legislature.

In other news on the radio, LePage said:

  • Democratic legislative leaders’ rejection of a new mental health facility on state grounds is a “first shot across the bow.” The procedural move last week in the Legislative Council thwarted the administration’s plan to move forward with building a new, $3 million forensic psychiatric unit next to Riverview Psychiatric Center on Augusta’s east side. But LePage said he’s now looking at sites in Freeport, the Bangor area and “down south” to build the facility, saying, “I’m going to get it, but it’s not going to be next to Riverview, so we’re not going to be able to use the same staff.”
  • He won’t include money to regulate Maine’s new legal marijuana market in the budget proposal. LePage, who opposed Question 1 on the November ballot, said his agriculture department will need between $3 million and $5 million to oversee the market, but he won’t put it in his budget, saying he’ll “let the Legislature deal with it.” He proposed increasing the 10 percent tax on marijuana under the law and taxing medical marijuana. LePage’s fiscal estimate is higher than the Legislature’s fiscal office, which said the state would need $2.5 million to administer the law through 2018, assuming the law is implemented then.
  • He said he’ll be “very quiet” this session, do as much as he can from the executive branch and avoid fighting with the Legislature. We’ll believe that first point when we see it. — Michael Shepherd

Quick hits

  • Health and Human Services Commissioner Mary Mayhew wants President-elect Donald Trump to “roll back” Medicaid. In an interview with the news arm of the conservative Heritage Foundation, she urged for “aggressive action” to “roll back Medicaid.” Maine is one of 19 states that hasn’t approved Medicaid expansion under the Affordable Care Act, which has been vetoed five times by LePage, citing rising costs of expansion in many states. Her department may be a talent pool for a Trump administration, and she urged the president-elect to “look at Maine” as a welfare blueprint.
  • A former Democratic lawmaker will be the chief aide to her party’s caucus in the Maine House of Representatives. Megan Rochelo of Biddeford, who served in the House from 2010 to 2014, will be chief of staff to the caucus in the new Legislature under incoming House Majority Leader Erin Herbig, D-Belfast. Lindsay Crete, who was a spokeswoman for Democratic presidential nominee Hillary Clinton and House Speaker Mark Eves, will head communications. They replace Andrew Roth-Wells and Ann Kim, respectively. — Michael Shepherd

Reading list

Best of Maine’s Craigslist

  • On the verge of love at the Brunswick Hannaford: A women noticed a “very, very cute” guy working in the seafood department, and our possibly lucky guy responded, saying he actually works “meat 99% of the time,” asking her for clarification because he’s been “called handsome by a few workers.” The woman retorted by saying she usually sees him in seafood, but “at least once” in meat. Will they meet? The suspense is killing me.
  • Woman likes mustache: A woman in Farmington seems to have had a chance encounter with a man sporting a “cute” mustache and “enjoyed talking to you for longer than usual” and wants to talk more. Here’s your soundtrack— Michael Shepherd
Michael Shepherd

About Michael Shepherd

Michael Shepherd joined the Bangor Daily News in 2015 after covering state, federal and local issues for the Kennebec Journal for three years. He's a Hallowell native who now lives in Gardiner. He graduated from the University of Maine in 2012 and is a graduate student at the University of Southern Maine's Muskie School of Public Service.