Republicans in Augusta are once again calling for structural tax reform that would allow working Mainers to keep more of their own pay.
In a joint statement issued Friday, Republican leaders said the updated revenue forecast from Maine’s Revenue Forecasting Committee shows Maine continues to over-collect taxes.
Since 2020, the total amount of taxes collected in Maine has soared, owning in large part to the influx of federal pandemic funds.
The Mills Administration has previously dealt with the over-taxation problem by sending payments to Maine residents, but Republicans are looking for a more lasting fix — and one that doesn’t involve Gov. Mills delivering payments to voters on the eve of future Election Days.
“State government has used the pandemic to grow $2 billion larger, while family budgets have gotten smaller,” Republican leaders said.
Legislative Republicans plan is the same as it was during failed biennial budget negotiations: they would like to see modest reduction in the income tax rate working Mainers pay on their first $20,000 to $30,000 in earned income.
The preliminary revenue projections show that the state could have nearly $1 billion more in revenue above the two-year partisan budget passed last month by Democrats. Republicans propose committing $400 million to provide comprehensive relief to taxpayers out of a budget that may ultimately reach $10.8 billion. According to the GOP, this can be done without cutting any services or existing programs.
While Republicans believe massive surpluses mean the state is taxing too much, Democratic lawmakers are likely eying that money as a way to fund a host of big-ticket items currently under consideration in the legislature, including a plan to give Medicaid to illegal aliens.