LePage, Democrats still can’t agree on the basic math of Question 2

Good morning from Augusta, where Gov. Paul LePage’s Office of Policy and Management released an economic impact study on a new 3 percent surtax on income over $200,000 that is drawing some criticism over its methodology.

The Republican governor opposed Question 2, which passed on the 2016 ballot with an aim to boost school funding by $157 million per year. His two-year budget proposal would get rid of the surtax after 2020 and the Legislature will consider efforts to scrap it this year.

On Wednesday, LePage’s policy office presented projections to the Legislature’s Taxation Committee that paint a bleak picture of the new law, saying Maine will lose up to 4,300 private sector jobs, 1,400 residents and $600 million in real disposable income in the first year.

But this is predicated on a big assumption — that the tax changes will cause between 780 and 1,255 people to leave in the first year. The tax changes are expected to affect 16,000 Maine tax filers, so the upper estimate would mean 8 percent would leave almost immediately.

Garrett Martin, the executive director of the liberal, pro-referendum Maine Center for Economic Policy, said the initial piece of the analysis “doesn’t seem to pass the straight-face test” and the exodus assumption “drives the whole model.”

Martin said his group was expected to release an analysis of LePage’s data on Friday, which will cite academic research showing that tax flight at levels this large is rare or nonexistent and say the change could yield “an additional $127 million in economic activity.”

Maine State Economist Amanda Rector, who works in the governor’s policy office, didn’t respond to questions about the methodology on Thursday, but the report says the assumptions were developed in conjunction with the Maine Office of Tax Policy.

Sen. Justin Chenette, D-Saco, the ranking Senate Democrat on the Legislature’s Taxation Committee, said Thursday that he questioned “the formula and the assumptions used in getting the data in the report.” He said a clearer picture will emerge after the surtax has been in place for a year and there are hard data to look at. — Michael Shepherd with Christopher Cousins

Republicans again hit Orono Democrat on ethics, flagging disclosure issue

A drip-drip ethics case prosecuted by Republicans against Rep. Ryan Tipping, D-Orono, continued on Thursday, when they flagged what a Maine ethics watchdog called an apparent violation of income reporting rules.

Tipping has been dogged by Republicans since mid-February, when LePage called on him to resign over a $9,000 job working on the Question 2 campaign. He was on the Legislature’s Education Committee at the time and now co-chairs the Taxation Committee.

Republicans have called this a conflict of interest, but the Democrat-led House of Representatives rejected a probe of Tipping last week by the House Ethics Committee.

Jonathan Wayne, the executive director of the Maine Ethics Commission, has said Tipping’s situation likely doesn’t rise to the level of a conflict of interest according to the Legislature’s ethics laws, which give lots of leeway to legislators.

But on Thursday, Republicans drew attention to Tipping’s income disclosure form for 2016, which doesn’t disclose his income from the campaign committee. The form is supposed to be amended under the state law if a lawmaker gets a new job paying more than $2,000, but Tipping didn’t disclose the income until 2017.

A legislator who doesn’t “willfully” file is presumed by law to have a conflict of interest and is subject to penalty. Assistant House Minority Leader Ellie Espling, R-New Gloucester, said it showed that House Speaker Sara Gideon, D-Freeport, must “convene the House Ethics Committee and remove Rep. Tipping from the Taxation Committee immediately.”

But “willfully” is the operative word. In a statement, Tipping said, “If I made an unintentional reporting error I am happy to work with the Ethics Commission to swiftly resolve it.” A Gideon spokeswoman said she supports that course of action and won’t convene the committee.

Wayne said it “does appear to be a violation” of reporting rules and said he’ll be contacting Tipping for a response. Similar issues have been resolved by the commission without much fanfare.

A notable example was when it assessed no penalty to then-State Treasurer Bruce Poliquin in 2012 after a Maine Democratic Party complaint around income reporting. Poliquin, a Republican, now represents Maine’s 2nd Congressional District. — Michael Shepherd

Correction: An earlier version of this entry referred to the wrong ballot question. It was Question 2.

Quick hits

  • Pingree objects to Trump’s plan to raid Coast Guard funds. Democratic U.S. Rep. Chellie Pingree called Republican President Donald Trump’s proposal to redirect Coast Guard and Federal Emergency Management Agency Funds to construct a wall on the U.S. border with Mexico “illogical and reckless.” In a written statement, Pingree said neither agency can afford the 11-to-14-percent cut and that the wall Trump proposes won’t improve national security. — Christopher Cousins
  • Hundreds of workers crowded the State House on Thursday to defend their union rights. They gathered at noon in the Hall of Flags to advocate against “right to work” bills, which would eliminate requirements that employees pay union dues, against efforts to remove the tip credit and for tipped workers to receive Maine’s new minimum wage, and against efforts to reduce state funding to municipalities, such as municipal revenue sharing. Maine AFL-CIO President Cynthia Phinney called on the state to increase municipal revenue sharing to a full 5 percent of state sales and income tax revenues, as opposed to the current 2 percent. — Christopher Cousins
  • New legislation would untangle web of resources for senior citizens. Maine U.S. Sens. Angus King and Susan Collins, along with Democratic Sen. Brian Schatz of Hawaii, have introduced legislation aimed at helping senior citizens understand the home-modification programs and services available to them. The Senior Home Modification Assistance Initiative Act would direct the U.S. Department of Health and Human Services to meld programs that are spread across at least five federal departments and develop an informational brochure for consumers. Here’s a soundtrack. — Christopher Cousins

Today in A-Town

  • The House and Senate are off until Tuesday but there are some committees in town today. This morning, the Government Oversight Committee holds its monthly meeting. The Office of Program Evaluation and Government Accountability will present the committee its report on the New Markets Capital Investment Program and will consider new projects for OPEGA to review. See the GOC’s full agenda by clicking here.
  • The Appropriations Committee is in to gather testimony on LePage’s budget proposal for the Department of Agriculture, Conservation and Forestry. Environmental advocates are expected to pan LePage’s attempts to scale back the office of public lands and the Land for Maine’s Future program.
  • That’s about all that’s on the docket under the dome today, though sometimes the days that look the quietest end up being the real humdingers. Here’s your soundtrack. — Christopher Cousins

Reading list

Will someone please explain why my kid keeps screaming ‘JOHN CENA’ at me?

It started a couple weeks ago. My 6-year-old walked up to me, put his face near mine, screamed “JOHN CENA!” and then just walked away.

It was a little strange, which is not to be confused with abnormal, at least in my household. But it has continued with no apparent trigger or reason. I’ve asked him a couple times what it means and all he will say is “JOHN CENA.” Again. I think it may be something he picked up from television or maybe his friends at school. Please help.  

Anyway, I had to Google John Cena this morning to see who he is. I thought maybe he was the actor who gets the teenage girl pregnant in the movie Juno, but that’s Michael Cera. Cena is a wrestler (not the real kind), rapper and TV star, it seems. Armed with this new knowledge, I approached my kid this morning, who was still laying in bed, waking up.

I put my face near his. I screamed as loud as I could: “MIKE TYSON!!!”

He looked up at me, not surprised at all.

“Ha ha ha,” he said. “JOHN CENA!!!”

I can’t win. Here’s a soundtrack. — Christopher Cousins

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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.