Commentary

Posik: “The Better Deal for Maine” Isn’t the Better Deal for Maine

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Maine Democrats have finally responded to Governor LePage’s budget proposal, announcing their plan last week exactly three months after the governor offered his own. Until now, the governor’s plan has dominated the political discourse in Augusta, and no democrat could offer a response to his plan.

The Democrats’ plan, titled “The Better Deal for Maine” incorporates some portions of the governor’s proposal, but still asks for $80 million to be allocated for the state to continue revenue sharing, and makes only $120 million in cuts to income tax. Governor LePage’s request is to make $450 million in income tax cuts.

The proposal also broadens the sales tax as suggested by LePage, but keeps the rate at 5.5 percent.

It also only offers income tax cuts to Mainers earning less than $150,000 a year, but keeps the current rate for those over who earn over that figure.

The democratic response is a modest attempt to appease their friends across the aisle and doesn’t go far enough in reducing income tax for Mainers or cutting state expenditures.

“The Better Deal for Maine” quite simply isn’t the better deal for Maine.

Governor LePage’s budget proposal broadens and increases the sales tax to 6.5 percent, makes $450 million in cuts to income tax for all Mainers, and eliminates revenue sharing by allowing municipalities to assess property tax on non-profit organizations.

In a move that surprised nobody, the Democrats’ budget only provides $120 million in tax relief to those that make less than $150,000 a year, and provides no relief to anyone who earns above that total. Everyone in Maine can agree that the folks that earn less than $150,000 a year deserve tax relief, but the rest of Maine does as well.

While Governor LePage’s plan is bold and controversial, its primary objectives are to re-align state spending and make Maine’s economy more competitive.

With these objectives in mind, everyone in Maine should receive relief.

The only way to make our state competitive is to supply job creators with the ability and incentive to create jobs. We need young, educated and well-paid workers in our state to be competitive again. The only thing that will attract that demographic is opportunity. Bringing opportunity to Maine can solve the economic and demographic issues our state faces, put Mainers back to work and reduce the need of government assistance; all of which are increasingly relevant issues that need to be resolved in order to get our economy on the right track.

The elimination of revenue sharing in Governor LePage’s budget is the most controversial aspect of his plan, but this move is necessary for Maine. Whether or not we should allow municipalities to tax non-profits to make up for this loss of revenue is ultimately up to our elected officials in Augusta, but including revenue sharing in their budget plan by Maine Democrats is a mistake.

Maine needs to re-align its priorities on state spending. By continuing revenue sharing, we are essentially condoning a state-level practice that increases spending and overtaxes our citizens.

If taxing non-profits isn’t the ideal way to make up for the lost revenue through the elimination of revenue sharing, find a different way to fund it. Don’t propose that we continue a practice that leads to more and more spending by towns each year.

It looks pleasing that Democrats aim to keep the state sales tax at 5.5 percent, but an increase isn’t necessary because revenue sharing will still exist.

Maine citizens can’t afford these taxes, and we won’t save enough money with the Democrats’ plan.

Their response is overdue, but it does offer a new addition to the political discourse in Augusta. However, its scope in cutting taxes appears to be more narrow as opposed to the governor’s plan.

About Jacob Posik

Jacob Posik, of Turner, is the director of communications at The Maine Heritage Policy Center (MHPC) and the editor of The Maine Wire. He formerly served as a policy analyst at MHPC. Posik can be reached at jposik@mainepolicy.org.

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