House lawmakers last week sustained Gov. Janet Mills’ (D) veto of a bill aiming to restructure Maine’s income tax brackets, creating a new top tax rate of 8.45 percent for the state’s highest earners.
This bill — LD 1231, An Act to Bring Fairness in Income Taxes to Maine Families by Adjusting the Tax Brackets — was originally introduced in 2023 by Rep. Meldon H. Carmichael (R-Greenbush) as a concept draft with the stated intention of “chang[ing] the income brackets” while “retain[ing] the same tax rates.”
The version of the bill advanced by Democrat members of the Taxation Committee — and ultimately approved by lawmakers in both chambers — proposed adding an 8.45 percent income tax bracket for individuals making more than $500,000, heads of household making more than $750,000, and those filing married joint returns for more than $1 million.
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Currently, Maine’s highest earners are taxed at a rate of 7.15 percent, meaning that LD 1231 would have raised the state’s top tax rate 1.3 percent had it been signed into law.
Aside from the addition of this new 8.45 percent bracket, the changes recommended by both the Democrat and Republican versions of this legislation were identical.
Gov. Mills announced her decision to veto this bill on Friday, April 26, criticizing it for failing to “deliver meaningful tax relief” to low-income Mainers while simultaneously disrupting the stability of the state’s tax revenue.
Mills also took issue with the process by which this bill was advanced, arguing that it did not provide an adequate opportunity for members of the public to provide input.
“This bill would make a substantial change to the structure of Maine’s income tax, but it moved through the Legislature in a manner that deprived the public of a meaningful opportunity to be heard,” Mills said. “The bill was printed as a concept draft and no actual legislative language was available at the public hearing.”
“The tax rate increases included in the enacted bill were not presented during the public hearing; they were first unveiled and discussed at the work session afterward, which denied the public and stakeholders, small businesses, for instance, the opportunity to weigh in and shape the discussion,” Mills wrote.
“Fundamental changes to the State’s income tax structure such as the one proposed in this bill should be made only following a transparent and deliberative process,” Mills said.
Click Here to Read the Full Text of Gov. Mills’ Veto Letter
To override Mills’ veto, the motion would have needed to earn the support of at least two-thirds of the members present. Based on attendance at the time this vote was taken, this threshold was calculated to be 82.
The motion failed by a significant margin, however, with a roll call vote of 57-65 that fell largely along partisan lines.
The vast majority of Democrats expressed support for overturning Mills’ veto, while nearly all Republicans voted in opposition to the motion.
A handful of Democrats — including Rep. William R. Bridgeo (D-Augusta), Rep. Allison Hepler (D-Woolwich), Rep. Stephen W. Moriarty (D-Cumberland), Rep. Jane P. Pringle (D-Windham), and Rep. Holly B. Stover (D-Boothbay) — joined the Republicans, voting to sustain the governor’s veto.
One Republican — Rep. Daniel J. Newman (R-Belgrade) — voted alongside the Democrats in support of overturning Mills’ veto.
27 lawmakers were absent at the time this vote was taken.
The state’s tax revenue will be off this year. Tourism will be way off. Bookings have fallen behind last year at this time. Just realeased Gov. figures show The Hole sale cost up for this period up .5% or 6% for the year. Govrnment spending still not under control–BIDENNOMICS .BUT the dimwits in Aguasta and DC just do not get it.