AUGUSTA, Maine - In response to Gov. Paul LePage's sweeping tax reform plan, Democrats today offered their response, a plan they say will be more beneficial to lower- and middle-class families.
Their proposal keeps the current sales tax at 5.5 percent, boosts revenue sharing for municipalities and maintains the tax exemption for nonprofits. Gov. LePage, meanwhile, wants to raise the sales tax to pay for a massive income tax cut, and eliminate revenue sharing altogether.
For weeks Gov. LePage has crisscrossed the state holding town meeting-style forums to sell Mainers on his sweeping package of tax changes included in his two-year, $6.5 billion state budget. Democrats have now countered with a plan of their own that adopts some of LePage’s ideas and rejects others.
But the reality is that this is the Democrats' opening gambit in the political process of reaching a compromise, says Democratic House Speaker Mark Eves, of North Berwick.
"You hit it on the head, and this is a counter proposal that demonstrates we are at the table negotiating this," Eves said. "There are elements of the governor’s plan that we agree with and we are adopting, and this is in the spirit of trying to get to an end game we can all agree with."
Republican Senate President Mike Thibodeau, of Winterport, says he will take some time to try to understand what the Democrats are proposing in their plan. He says the biggest priority for most Republicans is lowering the overall tax burden on Mainers.
"Republicans recognize there are three legs to the stool: There is sales tax, property tax and there is income tax," Thibodeau said, "and we are interested in reducing the overall tax burden to Mainers. So we will be looking at the proposals and seeing how it will affect the very people that are paying the bill."
Thibodeau says whatever is finally hammered out will need a two-thirds vote of the Democratic House and a two-thirds vote of the Republican Senate to become law. He says both parties will have to give during the process.
Senate Democratic Leader Justin Alfond, of Portland, agrees. "We have prioritized certain things. We prioritized the middle class for their income taxes. We prioritized Maine people by not increasing the sales taxes. We prioritized all Maine home owners with doubling the homestead exemption, not just seniors. We said everyone should get that homestead exemption. What we did was not use all the dollars."
The Democrats’ proposal leaves about $100 million on the table. This, they say, could be used for investments in education, along with items like roads and bridge improvements. But it also could also wind up being used in the negotiation process to pay for other provisions needed to reach an agreement.
And if you want to hear more about what they have in mind, the Democrats say they will discuss their plan with Mainers in forums across the state in the weeks ahead.
In a separate news conference Thursday, Republicans added a twist of their own to the discussion. They say the size of state spending should also be part of the negotiations, not just the elements of tax reform.
"Education, Department of Health and Human Services account for about 80 percent of the budget," said House Republican Leader Ken Fredette, of Newport. "And so we need to look at that and say, realistically, what can we afford? And then, what are the implications on local property taxes when we look at that?"
Fredette says he thinks one of the first areas of new expenditures lawmakers should carefully consider is Gov. LePage’s proposal to give an additional $20 million a year to the University of Maine system.
So how long will it take for lawmakers to reach an agreement? The Legislature’s statutory adjournment date is June 17, but even the most optimistic of legislators don’t think that date will be met.
