The proverbial “sausage making” is underway at the State House as lawmakers begin the long, often contentious process of crafting a two-budget. Gov. Paul LePage appeared before two legislative committees to make a case for his $6.8 billion plan, which he says is aimed at improving Maine’s economy.
In his final two years in office, LePage is hoping to win support for a budget that contains several major initiatives that he has pushed for in the past. He wants to rewrite the school funding law, reduce school administrative costs and also shrink overall state spending.
He says his plan would also mitigate the economic harm caused by two newly approved citizen initiatives. One is the 3 percent surtax on household incomes over $200,000 a year, which would raise money for a new fund for public schools. The other is a series of increases in the minimum wage, which he says will drive up costs for those on fixed incomes.
“My budget will help to shield the vulnerable from the sharply rising costs that they will be facing in the coming year. We have prioritized the elderly, the disabled and the mentally ill in this budget,” LePage says.
In order to lower the income tax, the LePage plan would broaden the sales tax to a number of goods and services.
Under questioning by Republican members of the Appropriations and Taxation committees, LePage fielded concerns about increasing one tax and lowering another. He acknowledged concerns around his proposal to raise the state lodging tax, but says he has talked with other Republican governors, including Rick Scott of Florida, who have reassured him.
“The sales tax does not hurt their tourism. Nobody that goes to Disney World says, ‘I am not going to Disney World because either sales tax is too high,’” LePage says.
But the governor’s proposal does more than than just broaden the sales tax base. He proposes reducing municipal revenue sharing, changing the homestead tax exemption and making other changes that one progressive advocacy group says says will benefit the rich.
The Maine Center for Economic Policy says the top 1 percent of taxpayers will get an average overall tax cut of $23,000 a year, but argues that 4 out of every 5 families will see a tax increase.
Municipal officials, including Lewiston city administrator Ed Barrett, told lawmakers that most property taxpayers will see their tax bill go up.
“The budget proposal will raise the property taxes of every nonsenior eligible homeowner by $376,” he says.
Other municipal officials gave similar testimony, and more can be expected through this week, with hearings focusing on the several tax components of the budget. Democratic Westbrook Rep. Drew Gattine, the House co-chair of the Appropriations Committee, says it’s important for the public to speak up.
“It isn’t just about what the governor has proposed. It’s about hearing from people across the state about what their priorities are and where they would like to see spending and things happen on the revenue side. So again, this is the beginning of a marathon, it is not a sprint,” he says.
Gattine and his co-chairman, Republican Sen. Jim Hamper of Oxford, expect budget hearings and related hearings will take eight weeks of public hearings. Only then can the complex work begin on crafting a budget.
Hamper says committees of jurisdiction will participate in the hearings and then make recommendations to the Appropriations Committee. He says there are a lot of thorny issues to sort through.
“The education portion, I think that’s going to be one of the bigger sticking points in the budget, it’s that portion on education,” he says.
After the tax portions this week, the committee turns to education issues next week. In the meantime, they hope to finish work on the governor’s proposed supplemental budget for the rest of this budget year.
