Good morning from Augusta. Gov. Paul LePage will release a long-awaited plan to conform Maine’s tax system to the new federal regime on Thursday, when his finance czar speaks to the Legislature’s budget committee at 1 p.m. We have an idea of what to expect.
Conformity is an arcane area of state policy, but it’s important because it gives Maine lawmakers significant leeway to change the state tax system. It was the source of a major fight between Republicans and Democrats that ended in compromise in 2016.
Conformity will be about offsetting a state tax increase. States regularly move to conform generally to the federal tax code after Congress makes changes, as it did last year in the first major overhaul in a generation.
LePage’s budget office has released a report saying while the new tax bill will provide a $1 billion benefit to Maine taxpayers in 2019, full conformity would also amount to a $250 million state tax hike almost solely due to the federal elimination of a personal exemption that is still in Maine law.
But it’s not so simple as keeping that tax break, since it would now be far harder to administer on the state level. So, LePage’s plan will be about offsetting that increase with other cuts. He has said he doesn’t want to raise taxes to conform.
So, how will he do it? A spokesman for the Maine Department of Administrative and Financial Services said Wednesday that the LePage administration won’t release details before Commissioner Alec Porteous speaks to the Legislature’s Appropriations Committee today.
But House Minority Leader Ken Fredette, R-Newport, submitted a bill late last year that is instructive. It would create a new child tax credit matching the federal credit of up to $1,000 per child and double the amount of earned income that a taxpayer can claim.
Fredette said Wednesday that a smaller child tax credit of perhaps $500 “would make sense” in the final package to help attract residents with families. He also said to expect a state-level form of federal changes aimed at repatriating foreign corporate profits and bonus depreciation, which gives businesses up-front deductions on certain purchases.
There’s plenty to fight about in there. Increased revenue projections will add fuel to those fights. Democrats don’t like bonus depreciation, which the liberal Center on Budget and Policy Priorities calls “ineffective.” They also may be wary of other corporate tax breaks.
On Tuesday, the state Revenue Forecasting Committee said revenue projections were up by $128 million for the rest of the two-year budget cycle in 2019. This may get baked into the conformity debate.
House Speaker Sara Gideon, D-Freeport, released a statement saying the projection “should serve to increase our focus on long term solutions that strengthen middle class families, while creating an environment that supports good paying jobs and a strong economy.”
But Fredette said it provides “another opportunity to drive down taxes on Maine families and businesses.” Look for this war between spending and lowering taxes to continue.
Today in A-town
The House and Senate convene this morning and there’s committee work this afternoon. For some, the day will be centered around the conformity hearing and a State House rally this morning led by the Maine Gun Safety Coalition. Organizers are predicting hundreds of participants will show up to protest a pending bill that would allow locked-up guns in vehicles driven by people dropping off or collecting students at schools.
However, Rep. John Martin, D-Eagle Lake, who sponsored the bill, has withdrawn support for it, according to the Portland Press Herald. In a letter, he told lawmakers “this is not the time to further discuss this legislation.” Despite Martin’s change, the bill will go to the House for procedural votes because Rep. Beth Turner, R-Burlington, voted for it in committee.
- A woman who cleaned a Bangor apartment building where the parents accused of killing their 10-year-old daughter lived says she reported potential abuse to the state. The Maine Department of Health and Human Services hasn’t commented in the case of 10-year-old Marrissa Kennedy, whose parents, Julio Carrillo and Sharon Carrillo, are charged with depraved indifference murder and were held Wednesday on $500,000 bail. Jill Reid, who cleaned the Bangor building where they once lived, said she spoke with DHHS at least six times about potential neglect. Bangor police went to that apartment complex six times during the approximate period in which they lived there.
- LePage says he is full speed ahead on creating a prison pre-release center in Washington County — with conditions. A LePage adviser told lawmakers Wednesday that upon legislative approval, the administration is ready to open the facility for up to 20 inmates this summer, but only if the Legislature agrees to sell the Downeast Correctional Facility property and erase references to it in state law. Some of the prison’s former employees, Washington County officials and business owners testified that LePage’s planned facility would be much too small.
- The LePage administration will end a child abuse prevention program it says is redundant. The Community Partnerships for Protecting Children program was expanded beyond the Portland and Bangor areas to western, central and midcoast Maine two years ago. Staff members for the organizations who have contracts to run the program found out Feb. 8 that the funding will end in September because the work is being done by another program and there is no federal funding available.
- Lung cancer cases in Maine happen far more often than the national average. The American Lung Association predicted in a new report that 1,400 Mainers will be diagnosed with lung cancer this year and 900 of them will die. Maine has almost 75 cases per 1,000 residents, which compares badly against 63 cases per 100,000 people nationally. Stop smoking, people.
When in Rome, do as the Mainers do
Lovers of winter in Maine have been disappointed this year, with the sun beating down and warm temperatures dominating the last two weeks of February.
If it weren’t for all the mud, the Daily Brief team would be just fine with this chain of events, though we admit that photos and video showing snowball fights and nuns building snowmen at the Vatican this week, where it snows only about once every six years, made us wish for more of the white stuff.
Almost. Here’s your soundtrack. — Christopher Cousins
Today’s Daily Brief was written by Christopher Cousins and Michael Shepherd and edited by Robert Long. If you’re reading this on the BDN’s website or were forwarded it, click here to get Maine’s only newsletter on state politics via email on weekday mornings.