Lead Maine Releases List of 32 Mills-Era Tax and Fee Increases as Pingree Promises Affordability

AUGUSTA, Maine — A conservative advocacy organization founded, by state Rep. Laurel Libby, has released a detailed accounting of what it describes as 32 tax increases, new fees and other fiscal actions approved during Democratic Gov. Janet Mills’ eight years in office.

The release comes as Democratic gubernatorial nominee Hannah Pingree, Mills’ former policy chief and hand-picked successor, campaigns on promises to make Maine more affordable.

Lead Maine’s newly released “Mills Tax Tracker” raises a straightforward question for voters: After eight years of Mills administration policies, what would actually be different under Pingree?

According to the organization, state spending has grown by 65 percent since 2018, Maine is now ranked as the fifth-most heavily taxed state in the country, and Augusta recently removed $292 million from the state’s Budget Stabilization Fund, commonly known as the rainy day fund.

The tracker argues that the Mills administration and Democratic majorities in the Legislature repeatedly turned to taxpayers, employers and consumers to support an increasingly expensive state government.

Some of the tracker’s entries are conventional tax-rate increases. Others involve new fees, expanded definitions of taxable products, the repeal of tax-relief programs and decisions not to adopt federal tax cuts.

Lead Maine discloses those distinctions and provides a legislative source for each entry, allowing readers to judge the organization’s methodology for themselves.

Taxes on Everyday Purchases

The tracker begins with several increases that directly affect consumers.

Maine’s cigarette tax increased from $2 to $3.50 per pack on Jan. 5, 2026. The 75 percent increase, the first in two decades, is expected to generate approximately $55.5 million annually.

The state also extended its 5.5 percent sales tax to streaming services, including platforms such as Netflix, Hulu and Spotify. That new tax took effect Jan. 1, 2026, and is estimated to generate approximately $12.5 million per year.

Software subscriptions, application downloads and other electronically transferred products became subject to the sales tax one year earlier, on Jan. 1, 2025.

Maine’s adult-use cannabis sales tax also increased from 10 percent to 14 percent, representing a 40 percent hike. Lead Maine estimates the increase could bring in between $3 million and $8 million annually.

The organization also points to a substantial increase in Maine’s real estate transfer tax. On the portion of property sales exceeding $1 million, the tax increased from $2.20 to $6 for every $500 of value, an increase of approximately 173 percent.

Cable, telecommunications, fabrication and certain digital services were also moved into the state’s broader sales-tax system.

Another change altered the way Maine taxes leased property. Instead of collecting the entire sales tax upfront, the state now applies it to each periodic lease payment.

The Mills administration also expanded the legal definition of tobacco products to include synthetic nicotine products before the higher tobacco-tax rate took effect.

Income and Payroll Taxes

Among the largest items on the tracker is a new 2 percent income-tax surcharge on income exceeding $1 million.

The surcharge increased Maine’s top marginal income-tax rate from 7.15 percent to 9.15 percent. The change was applied retroactively to Jan. 1, 2026, and is expected to generate approximately $74 million annually.

Maine workers and employers are also paying a new 1 percent payroll tax to finance the state’s Paid Family and Medical Leave program.

Collection of the tax began Jan. 1, 2025, although benefits did not begin until May 2026. The cost is generally divided between employers and employees and is expected to collect more than $300 million annually.

Lead Maine describes the payroll tax as the broadest new tax imposed on working Mainers during Mills’ tenure.

The tracker also faults the state for declining to recognize several federal income-tax deductions involving tips, overtime wages, seniors and interest paid on certain car loans.

Maine also added a phaseout of its pension-income deduction for higher earners. Beginning with the 2025 tax year, the deduction starts to phase out for single filers with more than $125,000 in federal adjusted gross income.

Taxes and Costs for Maine Businesses

Lead Maine identified numerous changes affecting employers, investors and business owners.

The state is phasing out the Business Equipment Tax Reimbursement program for retail property. Reimbursements are scheduled to fall from 100 percent to 50 percent in 2027 before being eliminated in 2028.

Maine also chose to phase in certain federal business tax provisions between 2027 and 2030 rather than adopting the tax relief immediately.

The state declined to conform to other federal provisions involving 100 percent depreciation, Opportunity Zones and gains from qualifying small-business stock.

An employer tax credit related to family and medical leave was also repealed beginning with tax years starting Jan. 1, 2026.

Maine previously limited the amount of net operating losses businesses may use to offset taxable income from 100 percent to 80 percent.

The state also expanded its corporate tax nexus standards, pulling more out-of-state companies into Maine’s corporate income-tax system based on their economic activity in the state.

Lead Maine further criticized the Mills administration for declining to adopt certain federal business provisions from the CARES Act, including expanded interest deductions and charitable-contribution rules.

The tracker also cites restrictions involving foreign-derived income and the Maine Capital Investment Credit. Maine required businesses to add back a federal foreign-income deduction and reduced the state investment credit from 9 percent to 1.2 percent.

Major business incentive programs, including the Pine Tree Development Zone and Employment Tax Increment Financing programs, were allowed to expire and were replaced by the Dirigo Business Incentive Program, which critics have described as less generous.

Higher Taxes on Health Care

Hospitals were also affected by a substantial tax increase.

The hospital service provider tax increased from 2.23 percent to 3.25 percent of net operating revenue beginning Jan. 1, 2025 — an increase of approximately 46 percent.

Lead Maine estimates the change raises roughly $29.5 million annually.

The organization also notes that the state repeatedly updated the base year used to calculate the hospital tax in each biennial budget under Mills. By moving the calculation to more recent years, the tax applies to higher hospital revenue levels.

Although the tax is imposed on hospitals rather than patients directly, higher operating costs can ultimately affect insurance premiums, medical prices and the financial stability of rural health care providers.

Property-Tax Relief Enacted, Then Repealed

The tracker also highlights the short-lived senior property-tax stabilization program.

The program was enacted to freeze qualifying older homeowners’ property-tax bills, but lawmakers repealed it approximately one year later amid concerns about its cost and administration.

Lead Maine counts that repeal as the elimination of a tax-relief program rather than a direct increase in a statutory tax rate.

The tracker separately identifies a $6.2 million transfer from dedicated property-tax relief reserves into the state’s General Fund.

For Maine homeowners already dealing with rapidly increasing municipal assessments and property-tax bills, the organization argues that both decisions weakened promised relief.

Higher License and Regulatory Fees

The Mills-era increases also extended to a series of licenses, permits and state-mandated fees.

A fee supporting the Lead Poisoning Prevention Fund tripled from 25 cents to 75 cents per gallon of paint, a 200 percent increase that is ultimately passed along to consumers.

Hunting and fishing license fees increased by between $5 and $19, depending on the license type. The Department of Inland Fisheries and Wildlife estimated the increases would raise approximately $2 million annually.

Fees for concealed-carry permits also increased.

The cost of a new permit rose from $35 to $50, a 43 percent increase. The renewal fee increased from $20 to $35, representing a 75 percent increase.

Maine more than doubled its arborist license fee, raising it from $75 to $180, an increase of 140 percent.

The state also imposed a new $10,000-per-lot assessment when a manufactured-housing community changes ownership.

That fee could become significant in larger mobile-home parks. A community containing 50 lots, for example, could face a $500,000 assessment as part of a sale.

The tracker also includes an increase in the PaintCare stewardship fee charged on containers of architectural paint.

Lead Maine acknowledges that the money is collected by the nonprofit PaintCare rather than deposited in the state treasury. It nevertheless includes the charge because the fee exists under a state-mandated stewardship program and is passed on to consumers.

$292 Million Withdrawn from Rainy Day Fund

The final entry on the tracker concerns the removal of $292 million from the Budget Stabilization Fund.

The withdrawal included $155.2 million for another round of one-time $300 payments to more than 500,000 Mainers.

Mills and Democratic lawmakers promoted the payments as immediate financial relief for residents facing high costs.

Critics countered that one-time checks do nothing to reduce the underlying taxes, energy prices, housing expenses and government spending contributing to Maine’s affordability problems.

They have also questioned the wisdom of drawing down nearly $300 million in reserves at a time when future state revenue remains uncertain.

The Complete List

Lead Maine’s 32 entries are:

1. A 75 percent increase in the cigarette tax, from $2 to $3.50 per pack.
2. A new 5.5 percent sales tax on streaming services.
3. A new sales tax on canned software, subscriptions and electronic products.
4. A 40 percent increase in the adult-use cannabis sales tax, from 10 percent to 14 percent.
5. A 173 percent increase in the real estate transfer tax on the portion of sales exceeding $1 million.
6. An expansion of the sales-tax base to cable, telecommunications, fabrication and digital services.
7. A change requiring sales tax to be collected on periodic lease payments.
8. An expanded tobacco-products definition covering synthetic nicotine.
9. A new 2 percent income-tax surcharge on income exceeding $1 million.
10. A new 1 percent Paid Family and Medical Leave payroll tax.
11. The phaseout of Business Equipment Tax Reimbursement for retail property.
12. The delayed adoption of certain federal business tax reductions.
13. Maine’s decision not to adopt several federal business and investment tax provisions.
14. The repeal of an employer tax credit for family and medical leave.
15. Maine’s decision not to adopt federal deductions involving tips, overtime, seniors and car-loan interest.
16. A limit allowing businesses to use net operating losses to offset only 80 percent of taxable income.
17. Expanded corporate nexus standards applying Maine taxes to more out-of-state businesses.
18. Maine’s decision not to adopt certain CARES Act business tax provisions.
19. Restrictions on foreign-income deductions and corporate investment credits.
20. A 46 percent increase in the hospital service provider tax.
21. Repeated updates to the hospital-tax base year.
22. The expiration of the Pine Tree Development Zone, Employment Tax Increment Financing and Maine Capital Investment Credit programs.
23. A phaseout of the pension-income deduction for higher earners.
24. The repeal of the senior property-tax stabilization program.
25. A 200 percent increase in the Lead Poisoning Prevention Fund paint fee.
26. Hunting and fishing license fee increases ranging from $5 to $19.
27. Higher fees for new and renewed concealed-carry permits.
28. A 140 percent increase in the arborist license fee.
29. A new $10,000-per-lot manufactured-housing community transfer assessment.
30. An increase in the state-mandated PaintCare stewardship fee.
31. The transfer of $6.2 million from property-tax relief reserves to the General Fund.
32. The withdrawal of $292 million from Maine’s Budget Stabilization Fund.

Would Pingree Be Different?

The tracker’s release places renewed attention on Pingree’s role in the Mills administration.

Pingree served as director of the Governor’s Office of Policy Innovation and the Future, effectively overseeing Mills’ policy agenda before leaving the administration to run for governor.

She previously spent eight years in the Legislature and served as speaker of the Maine House.

Pingree has made affordability a central theme of her gubernatorial campaign, but she has also supported additional government investment in housing, health care and climate programs.

She has received the backing of Mills and much of Maine’s Democratic political establishment, making it difficult for her campaign to argue that she represents a clean break from the outgoing administration.

Democrats maintain that increased state spending under Mills expanded health care, increased education funding, supported municipalities and helped Maine residents weather the pandemic and its economic aftermath.

Republicans argue that many of those programs created recurring financial obligations that will remain long after temporary federal funding disappears.

For voters, the issue may come down to whether Pingree can credibly promise a more affordable Maine while defending or declining to distance herself from the administration in which she played a central policy role.

After 32 taxes, fees and fiscal actions identified by Lead Maine, Pingree will have to explain whether her administration would take Maine in a new direction or merely continue the Mills agenda under a different name.

For Maine families struggling to pay for groceries, housing, electricity, heating fuel and property taxes, that answer may prove more important than any campaign slogan.