Daily Catch

Our revenue surplus should be returned to the people through tax cuts

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Over the next three years, the State is projected to collect more than $362 million than budgeted. Maine can–and should–return this money to the hardworking people who earned it.

Now that we have restored fiscal sanity to Augusta, we need to ensure that legislators and the new administration make wise choices that continue to drive prosperity for Maine people.

The Biennial Budget recommendation I have provided to Governor-elect Janet Mills does this in two critical ways. First, instead of using the budget surplus to fund Medicaid expansion, we included an increase to the hospital tax to provide sustainable funding for these ongoing costs.

The hospital tax is how the federal government envisioned states would pay for their share of the costs of Medicaid expansion. In Maine, we estimate this to be about $100 million per year.

Since expansion revenues to Maine hospitals are expected to well exceed $100 million, this hospital tax makes sense.

The second major recommendation in the budget is to cut taxes by an additional 20 percent. My administration has already lowered taxes by 20 percent for more than half a million Mainers.

Cutting taxes for Maine families has proven to be an excellent policy decision. Despite this cut, we are taking in record tax revenues. That’s why I’ve recommended to Governor-elect Mills that she return surplus tax dollars to Maine families in the form of new income-tax reductions.

We are seeing higher revenue in almost every tax category–sales and use tax, individual income tax, and corporate income tax.

We must always remember that the revenue we receive in taxes is due to the hard work of Maine’s people. That’s why I’m advocating for accelerating the tax cuts contained in our budget proposal.

Those tax cuts would reduce Maine’s income tax burden by another 20 percent. Our strong economic growth and rising wages reflect Maine’s strong economy. Cutting state income taxes means the money you would have paid stays in your wallet.

Democrats stated they want to use surplus money to fully fund revenue sharing at 5 percent, rather than the 2 percent the towns have received for the past 6 years. There is no guarantee that your local government will cut your property taxes, never mind dollar-for-dollar if revenue sharing is increased.

The people of Maine and the municipal balance sheets would be better off if the state cut income taxes and allowed municipalities to collect property taxes or service fees from non-profits to supplement the local property taxes.

Everyone should contribute to the operation of local community governments. Eighteen billion dollars of property value has been taken off the tax rolls over the past 20 years. Hard-working Maine families have to pick up the tab, while wealthy land trusts with millions of dollars continue to take more property off the tax rolls.

My administration’s budget recommendations offer a path to sustainable Medicaid expansion funding and strategic investments in needed improvements while cutting income taxes.

It can be done.

During my time as governor, our administration has brought stability to state finances and implemented pro-business, pro-growth policies across state government. The incoming administration is poised to assume a state government that is vastly improved–both structurally and financially–from the one I inherited.

Don’t let them go on a spending spree with your money. There is no reason to roll back the tax cuts we put in place in my first term.

I’ll be watching.

About Paul LePage

Governor Paul LePage (R) has served as the 74th Governor of Maine since 2011. Prior to his time as governor, LePage served as the general manager of Marden's and as the mayor of Waterville.

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