When Maine Secretary of State Matthew Dunlap was accepting public comment on the ballot language for the upcoming “Universal Home Care” (UHC) referendum between May 16 to June 16, roughly half of the comments came from people who were mobilized by The Maine Heritage Policy Center. Organizations like MHPC often reach out to their supporters to educate them about the impact of these ballot questions, and it is a positive sign that so many citizens weighed in on the language.
In this case, MHPC mobilized citizens to encourage the Secretary of State’s office clear up confusion about how many new tax revenue sources would be generated under the law and who exactly would be impacted. The comment submitted by MHPC called on Sec. Dunlap to ensure the ballot language made clear that family income would be subject to the taxes, not just individual income. This is an important distinction because the UHC initiative, if passed, would affect more people and levy more taxes than was claimed in the original language.
Amongst opinions of all stripes on the issue, it was striking to read the following public comment from Aidan Davis, senior policy analyst at The Institute for Taxation and Economic Policy (ITEP), a DC-based organization that is affiliated with the left-leaning Maine Center for Economic Policy (MECEP).
ITEP’s public comment states: “We found the language of the initiative to be clear in describing that individual (not household) income would be subject to the tax.” It continues, “Our read of the phrasing contained in the fiscal impact statement of the ballot measure led us to that same interpretation. The use of the word individual rather than household or tax unit…made that distinction clear.”
This is inaccurate, and here’s why: As outlined in a technical analysis conducted by Maine Revenue Services, “for the two income tax provisions in [the UHC initiative], federal [adjusted gross income] filed, and thus [Maine adjusted gross income], includes the income from both spouses filed on a joint return basis, with no provision of state law allowing their separation.” The analysis concludes, “For all three tax provisions in [the UHC initiative], MAGI includes the income from both spouses filed on a joint return basis.”
It is unclear why ITEP did not understand this fact, or why they felt the need to specify that the opposite is true.
What is clear is that they are quite confident in their analysis. So confident, indeed, that they declared themselves the only organization capable of executing such an analysis. Their public comment states: “aside from Maine Revenue Services, we are the only organization with data and modeling sophisticated enough to construct distributional models of the impact of tax policies in Maine.”
However, it’s evident that ITEP never conducted such an analysis. Despite the fact that the word “individual” appears in the fiscal note crafted by the Office of Fiscal and Program Review, we learn from public comments submitted by the Maine Department of Administrative and Financial Services that the $310 million figure referenced in the fiscal note does include new tax revenues generated by married couples whose combined income exceeds the threshold.
“The Department [of Administrative & Financial Affairs] believes that the proposed question should be modified…to provide additional clarity to Maine voters…The use of the term “individual” is of concern because it may cause confusion for voters who file joint income tax returns….this…represents a significant portion of the $310 million estimated in the fiscal note.”
Thankfully, Sec. Dunlap agreed, and he adjusted the language to reflect “individuals and families.”
Based on recent reports about the impending home care tax proposal, it appears many proponents are eager to keep the facts from the public. So, when reading about this topic, it’s probably a good idea to beware of self-appointed “experts,” especially when they inexplicably claim to be in a class by themselves.