Proposed tax increases spark clash in Maine Legislature

Yahoo

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Jun. 5—AUGUSTA — Lawmakers and advocates clashed over proposed tax increases Thursday as the debate over the state budget heats up in the closing days of the session.
Progressive activists and some Democrats gathered at the State House and urged lawmakers to increases taxes on the wealthiest Mainers to help close a budget gap.
But Republicans reiterated at a separate press conference that they will oppose any budget that includes tax increases. And Gov. Janet Mills, who has proposed a series of targeted tax increases and program cuts in her budget, has said she would not support any broad-based tax increases.
Lawmakers are facing a budget squeeze as they try to pay for programs and commitments created in previous budgets, as state revenues flatten.
Senate Minority Leader Trey Stewart, R-Presque Isle, said Democrats are responsible for the budget deficit because they have repeatedly passed majority budgets without Republican support.
"They own this," Stewart said. "They set up three majority budgets in a row. They have run out of your money, and now they want to raise taxes on Maine people. We're not going to vote for it. But if they want to jump over that cliff, that's on them."
Historically, lawmakers have sought to pass two-year state budgets with a bipartisan supermajority, so the funding can become available at the start of the fiscal year on July 1. Budgets passed by a simple majority, which the Democrats have done in recent years, don't become effective until 90 days after adjournment.
Most of the budget negotiations have been taking place behind the scenes among Democrats, who are balancing Mills' proposed budget with their own priorities. More than 100 bills passed by the Democratic majority await funding.
Earlier this session, Democrats used their majorities to pass an $11.3 billion continuing services budget over Republican objections. It includes funding to cover 55% of public education costs and provides $122 million to help stabilize MaineCare. But that budget doesn't include at least $122 million in additional funding needed to support MaineCare — Maine's Medicaid program — in the second year of the budget.
The continuing services budget does not include $285 million in additional spending originally proposed by Mills, who also has proposed $156 million in tax increases, including increasing taxes on cigarettes, online streaming service and other areas.
Mills has also proposed cutbacks, which include eliminating state funded food assistance for noncitizens, cutting two crisis receiving centers planned for Aroostook and Kennebec counties and stopping planned increases in child care worker stipends and cost-of-living increases for direct care workers.
Mills also proposed reforms to the state's General Assistance program aimed at reducing costs. The governors said the changes would return the program to its original mission as a last resort safety net, rather than an ongoing housing assistance program.
Advocates argued that increasing taxes on wealthy residents and corporations could raise millions of dollars to avoid the cuts proposed by Mills and support other vital programs.
Maura Pillsbury, tax policy analyst for the Maine Center for Economic Policy, urged lawmakers to pass LD 1089, which would increase taxes on incomes over $1 million to fund public kindergarten through 12th grade education, and LD 1879, which would increase the tax rate on large corporations to support agricultural businesses.
"These are reasonable, responsible steps to balance our budget and protect critical services, like child care, health care and food assistance, and not balancing the budget on the backs of vulnerable Mainers through harmful cuts," Pillsbury said.
Amended versions of each of those bills have been advanced by the Taxation Committee and face floor votes in the coming days. It's unclear what changes the committee recommended, since the amendments are not yet posted.
Advocates also support bills to overhaul of the state tax code to shift the burden more to higher income earners, which passed last year but vetoed by Mills, and increasing taxes on real estate sales over $1 million.
Rep. Cheryl Golek, D-Harpswell, said her proposal for a millionaire's tax is modest compared to a proposal approved by voters in 2016 to add a surcharge to incomes over $200,000 and would correct "massive injustice in the tax system."
"Today, I am asking that our richest share a slice of bread to those who turned the dough and made the loaf for them to eat," Golek said. Our economy shouldn't be balanced on the backs of the working class. Hard-working Mainers are struggling to pay their bills, yet we continually ask more of the most vulnerable among us by cutting vital programs and services instead of making our tax code more fair."
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