High income Mainers may soon be paying a bit more in state taxes, thanks to revenue-hungry Democrats.
After being held at the request of a Penobscot County Democrat, lawmakers are now reconsidering a bill that aims to levy an additional tax on income earned by Mainers over $1 million in order to help fund public education.
The Senate vote 20-15 Monday in support of passing an amended version of this bill, reversing course on their previous rejection of the proposal.
Under the language now advanced by the Senate, an additional two percent surcharge would be levied on all income earned by individuals over $1 million, $1.5 million for heads of household, and $2 million for married couples.
The revenue generated by this new tax would go towards funding the state’s share of public per-kindergarten through 12th grade education.
Included in the bill’s language is the establishment of the Fund for Public Pre-Kindergarten to Grade 12 Education into which the revenue collected from this tax would be deposited in accordance with the procedures outlined in the legislation.
This represents a slight haircut from the original draft of LD 1089 advanced by Rep. Cheryl A. Golek (D-Harpswell), as she initially proposed charging Mainers a four percent tax on income earned over this threshold.
[RELATED: Plan to Levy Extra 4% Tax on Income Over $1 Million to Fund Public Schools Narrowly Rejected]
A late March public hearing on LD 1089 drew a great deal of testimony from both supporters and opponents of the proposal.
While those representing business and free market interests testified in opposition to the bill, representatives of municipal, educational, and social justice interests expressed support for the measure.
Those arguing in support of the bill focused both on the need for additional state funding for public schools, as well as on the perceived fairness that this surcharge would create within Maine’s tax code.
Opponents of LD 1089 argued that tax increases would be harmful to the state’s economy, have an outsized impact on entrepreneurs and businesses, and not necessarily improve public education as hoped.
Following this public hearing, members of the Taxation Committee voted along partisan lines in support of this bill, with all Republicans opposing it and all Democrats favoring it.
[RELATED: Extra 4% Tax on Income Over $1 Million on Track for Adoption After Committee Dems Recommend Hike]
Although this was expected to set this bill along a path for approval, LD 1089 encountered some resistance when it was brought on the floor of the House.
A motion to accept the majority’s Ought to Pass as Amended report narrowly failed in a roll call vote of 70-72.
After a motion to reconsider the vote failed, the minority Ought Not to Pass report was approved without a roll call.
Similarly in the Senate, a motion in support of the bill’s passage narrowly failed in a roll call vote of 17-18, leading to the Ought Not to Pass report being accepted by default.
Although LD 1089 was then placed in the legislative files as a dead bill, it was held at the request of Sen. Mike Tipping (D-Penobscot).
This request than opened the door for Monday’s reconsideration of the legislation, at which point the Committee’s majority Ought to Pass as Amended report was accepted in a roll call vote of 20-15.
LD 1089 was then sent back down to the House in non-concurrence. As of this article’s publication, the lower chamber has not yet taken up the bill for a second time.
