A proposed tax hike on Maine’s millionaires designed to increase funding for public pre-K-12 education has been carried over into the next legislative session – which is a small victory for the ‘tax the rich’ crowd as the measure was looking at total defeat earlier this month.
When the Legislature adjourned sine die Wednesday evening, lawmakers had yet to finalize their positions on a number of bills and resolutions introduced over the past few months. In turn, all outstanding legislation was carried over to the next special or regular session of the 132nd Legislature.
Among these bills was LD 1089, sponsored by Rep. Cheryl A. Golek (D-Harpswell), that sought to impose a new two percent “surcharge” on income earned over $1 million in Maine.
The two percent tax would be applied only to the portion of a Mainer’s income that is above the $1 million threshold, meaning that everything up to that point would not be subject to this additional fee.
The revenue collected from this tax could only be used to fund public pre-kindergarten through grade 12 education. As is the case will all similar initiatives, however, future legislatures may pass bills allowing for all or some of these funds to be repurposed.
It is for this reason that Rep. Gary A. Drinkwater (R-Milford) sought to amend Maine’s constitution to protect the funds collected for Maine’s new Paid Family and Medical Leave (PFML) program from being used for anything else in the future.
An amended version of his bill directing the Maine Department of Labor (MDOL) to find the best method for protecting PFML revenue from being re-appropriated down the line.
[RELATED: MDOL Directed to Find the Best Method of Protecting PFML Funding from Being Repurposed]
A late March public hearing on LD 1089 drew a great deal of testimony from both supporters and opponents of the Harpswell Democrat’s proposal to impose an additional tax on Mainers earning over $1 million.
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). Like Dr. Frankenstein, Sen. Tipping breathed new life into the tax hike.
The Senate went on to reconsider the bill, at which point the chamber reversed course and advanced the bill as amended by the Committee’s Democratic majority in a roll call vote of 20-15.
Although a motion was made the next day in the House to recede and concur with the Senate’s acceptance of this report, consideration was tabled and was carried forward as unfinished business.
When the Legislature adjourned sine die on Wednesday, the House had still yet to vote on LD 1089. Consequently, the bill was carried over to the next special or regular session of the 132nd Legislature.
