After failure in House, what happens next on tax relief bill?

Posted March 28, 2012, at 7:40 p.m.

AUGUSTA, Maine — About a dozen House Republicans broke rank Tuesday to vote against a tax relief bill that had been championed by their party.

The bill, LD 849, isn’t dead yet, but Tuesday’s surprising vote means the Senate will have to reconsider the proposal — and possibly change it — in order to get the House to approve.

As written, the bill would increase the size of the top income tax bracket and then gradually reduce the highest income tax rate to 4 percent with any surplus revenue.

Some of the “no” votes from moderate House Republicans such as Patrick Flood of Winthrop and Meredith Strang Burgess of Cumberland were predictable. But others who may not be considered aligned with the moderate side of the party, such as Amy Volk of Scarborough, also voted against the bill.

“I support the idea, but I didn’t think that this bill really achieved tax relief in a way that’s flexible,” Volk said Wednesday. Asked whether she could support the tax bill if it’s amended, she said, “I don’t see the advantage of passing this now since we’re not looking at any extra revenue anytime soon.”

Volk’s sentiment, which is shared by at least a few of her House GOP colleagues, makes predicting what happens next difficult.

The Senate has a few options. It can schedule another vote on the same bill and send it back to the House for reconsideration in hopes that the outcome might be different. It can amend LD 849 again to make it more palatable to House members who voted against the bill. Or it can let the bill die by postponing action.

Senate Majority Leader Jonathan Courtney, R-Springvale, said he expected some opposition in the House but wasn’t sure Wednesday what the next step would be.

“I think we’ll look at the options and decide how best to get support,” he said.

The Senate first approved the bill about two weeks ago in a party-line vote, but only after an amendment was attached that calls for excess revenue to be used first to fully support the state’s underfunded circuit-breaker program and then to provide tax relief.

That vote set up what most lawmakers assumed would be a similar vote in the House.

However, when the bill came to the House floor late Tuesday, several Democrats — led by Rep. Bob Duchesne of Hudson — urged members to bring the idea back to constituents like he did.

“Then you can quietly commit this bill back to committee next week, where it can be gently smothered with a pillow,” he said. “Nobody needs to know that we actually discussed skimming 40 percent of the money that was supposed to pay our debts.”

The final vote was 72-61 to reject LD 879. Several House members were not present Tuesday, but with a slim majority, Republicans needed most of their members on board.

Volk said she knew her vote would not be popular with rank-and-file members but she couldn’t in good conscience support the bill.

“As long as the House Appropriations chair [Patrick Flood] says he can’t support this, I’ll probably side with him,” she said.

The tax relief bill had become a wedge issue for Democratic and Republican lawmakers.

Republicans have been arguing that it simply gives money back to the taxpayers, something that didn’t happen the last time Maine had a surplus.

But Democrats said LD 849 provides tax relief in an inflexible way before the state settles certain obligations, such as past debt. Others argued that reducing the income tax in such a way would shift the burden on municipalities to fund more services through increased property taxes.

Courtney acknowledges those concerns on Wednesday and hinted that they could be addressed in an amendment.

“I understand that some people want to make sure we adequately fund our reserve accounts and rainy day fund and I respect that,” he said.

Follow BDN reporter Eric Russell on Twitter at @BDNPolitics.

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