Tax reform needs to include government restructuring

By Chris Hall, CEO, Portland Regional Chamber
Posted May 13, 2013, at 10:22 a.m.

Editor’s note: This report is compiled weekly for members of the Portland Regional Chamber. It provides a breakdown of recent news around state policy, as well as a heads-up on coming events. The Bangor Daily News is publishing this report in cooperation with the PRC.

Last Friday, the Legislature’s Taxation Committee held a public hearing on LD 1496, the “Gang of 11” tax reform plan ( PPH, BDN, LSJ). The general sense of the hearing was “thanks for the good bipartisan effort, but no thanks for the plan itself.”

The PPH’s Steve Mistler and the BDN’s Matthew Stone both gave us in-depth pieces on the substance, history and politics of this bill and other attempts at sweeping tax policy changes.

Some folks wrote last week in support of the bill — Tim Hussey, Charles Lawton, the PPH editors and the BDN editors all praised it. Some folks didn’t like it at all — Gov. Paul LePage said it was a “bad deal” ( BDN), and M.D. Harmon and J. Scott Moody explained why they agreed. Yesterday both sides took the field in the PPH editorial pages.

With a work session scheduled Tuesday the bill’s lack of support from the governor, from Democratic and Republican state house leadership and from a wide cross-section of Maine’s business community makes its chances look dim.

At the Portland Regional Chamber we’ve discussed LD 1496 several times, and we will again next week. As veterans of previous tax reform debates our volunteer leadership decided to take no position on LD 1496, but instead asked us to inform our members so they could weigh in themselves. Many did, and not surprisingly we have lots of members on each side of the bill.

Beyond the merits of LD 1496 looms a bigger question — when do we get back to the conversation about the cost of multiple layers of government? The governor got it right at Eggs & Issues last week — local control is expensive. And if you think tax reform is hard, try restructuring government at any level.

There are no easy answers. But the great white whale that is comprehensive tax reform will never be landed without its companion — comprehensive restructuring of our government services. That’s where the substance, politics and history of public sector finances converge. And if there’s an answer, that’s where we’ll find it. Stay tuned.

Notable read: Some days there’s just too much to read. If you only have time for one thing:

Thankfully the fires in Lewiston seem to have stopped, but the need for help remains. Please read the BDN editors’ “ What you can do for Lewiston” and do whatever you can. Thanks.

Spotlight legislation: In the State House legislative committees are working full tilt to complete their work on hundreds of bills — as they do the number of work sessions increases. Click here for the ever-changing list.

Public hearings are winding down, but this Friday the LePage Administration is presenting three major education reform bills for public hearing, starting at 9 a.m. before the Education and Cultural Affairs Committee:

LD 1510 enhances the Department of Education’s ability to help failing schools, and also allows parents to place their children in any other public or private school if their resident school is failing.

LD 1524 shifts the costs of remedial classes given by higher education institutions from the college to the K-12 system that graduated the students in need of remediation.

LD 1529 lifts the 10-school cap on charter schools and allows higher education institutions to launch charters.

MPBN covered the Administration’s late-emerging school reform agenda and early reaction to it. You can find more comment and news on these bills just below in our State House: Education section. And you’ll hear more as this week unfolds.

In the State House: Not every Democrat supports linking Medicaid expansion to hospital repayment ( BDN, KJ). Mike Cuzzi explained why it’s a good strategy while Steven Michaud made the case for keeping the two separate.

Elsewhere the state employees’ union has asked the Administration for a plan if budget talks fail and a state shutdown happens ( BDN). Jail funding problems continued ( PPH). The governor’s 4th veto was issued ( BDN). Eliot Cutler assessed his chances in a 3-way race for governor next year ( BDN). The governor handed out his annual Awards for Business Excellence ( BDN).

State policy round-up:

• Ballot watch: Additional funding for the Maine Clean Elections Act was proposed ( PPH). Rank choice voting proposals may founder on high costs ( BDN).

• Bonds: The governor suggested an additional delay in issuing already approved bonds as part of a cost savings package in response to lower state revenue expectations ( BDN).

• Budget: The PPH editors outlined how to build a state budget without the governor’s participation. Charlotte Warren questioned the governor’s proposals that reduce state aid to local government.

• Economic development: LD 90, the centerpiece legislation from the Joint Select Committee on Maine’s Workforce and Economic Future, has been finished and sent to the full legislature ( MPBN).

• Education: Democratic legislators offered their own alternative grading system for Maine schools ( PPH, BDN, MPBN), and almost simultaneously the Administration followed up their grading system with a $3 million dollar proposal to help failing schools ( BDN, MPBN).

Comment came from the BDN editors on the governor’s failing grades, the PPH editors and Bill Nemitz rejecting the governor’s failing schools proposal, the BDN editors taking a slightly different view on that initiative, and Alan Caron, Bill Webster and Mike Tipping all on the grading system’s problems. International recruitment of K-12 students will be hurt by the governor’s grades ( BDN).

Three charter schools got their final approvals ( BDN) while lawmakers struggled with how charters should access state funding ( BDN) and the governor introduced legislation to remove the 10-school cap on charters ( PPH).

Legislative review of state rules governing teacher evaluation were put on hold by Democratic leadership pending debate on the governor’s late-session education initiatives ( BDN) — an agenda that’s meeting resistance ( MPBN).

Theo Kalikow wrote about the future of higher education, Sheryl Lee wrote to oppose virtual schools and Lynn Plourde wrote about education reform from a teacher’s perspective.

• Energy: The governor continued to press lawmakers to remove wind power goals from the state’s energy plan ( BDN). Legislators voted to ban ethanol sales in Maine, pending action by other states to do the same ( BDN).

• Environment: A tar sands oil moratorium was debated ( PPH, LSJ). New mining rules continued to receive legislative review ( BDN). A bill directing the DEP to restart climate change work was approved in committee ( PPH).

• Health care: A bill requiring publication of hospital financial data and pricing information had a hearing ( PPH, LSJ, MPBN). The BDN’s Jackie Farwell examined comparative health care costs in Maine. In the PPH, Jessica Hall asked industry leaders for explanations. Ed Kane wrote about the importance of price transparency. Sen. Rod Whittemore wrote to defend 2011 Republican state health care reforms. Reaction to the MaineHealth-Anthem plan came from other providers ( BDN).

• Regulatory reform: Is your dancing license up to date? The BDN explained the confusion around state and local license requirements.

• Small business: At the State House local franchise owners sought more control of their businesses from national franchise chains ( MPBN).

• Tax: Higher tobacco taxes were urged last week by anti-smoking advocates ( BDN, MPBN) — business owners opposed higher taxes ( BDN). Robert Smith urged spending cuts to achieve tax fairness.

• Transportation: Several bills dealing with the east-west highway project were disposed of last week ( PPH, BDN, MPBN) — Cianbro’s Peter Vigue said the project would still go forward ( BDN).

• Welfare reform: A bill to ban junk food purchases with food stamps was rejected on party lines in committee ( BDN), but the Administration may pursue the policy without the Legislature ( BDN).

Around the region: A hearing was held on the Mercy-Eastern Maine Healthcare Systems merger ( BDN). Elsewhere:

• In Cape Elizabeth some parents weighed in against all day kindergarten plans ( Forecaster).

• In Falmouth the planning board gave its final approval to Route 1 improvements ( Forecaster).

• In Gorham the Current reported on school grades in Gorham.

• In Portland tomorrow voters will have their say on the proposed school budget ( PPH, Forecaster) — don’t forget to vote. Also:

• A proposed ban on polystyrene packaging advanced ( PPH, Forecaster, PDS);

• Work on proposed renovations to the Congress Square Plaza continued ( Forecaster), and Travis Wagner commented;

• Waterfront vacancies remain high ( PPH);

Laura Frank defended Portland High School against its bad grade from the LePage Administration;

• Baxter Academy got approval to open this fall with a smaller class size ( PPH); and

• For the latest check out Chris O’Neil’s Inside City Hall. Chris serves as a consultant to the Portland Community Chamber, working closely with members and staff to represent the Chamber before Portland city officials. Inside City Hall covers a host of Portland related issues. It’s something that everyone with an interest in Portland affairs will want to read.

• In South Portland the Kaler School community reacted strongly to the school’s bad grade ( Forecaster, Current).

• In Scarborough the council finalized the municipal budget ( Current). The school board finished its work on the school budget ( Current).

• In Westbrook the Current reported on school grades in Westbrook. The council approved demolition of the old Maine Rubber facility ( PPH).

Contact your local officials: Visit our website to find links to all your municipal and state house officials. Remember — if you don’t speak out, the people who represent you have no way to know what you think. So keep those email, calls and visits coming.

Digging deeper at the State House: Most of you probably don’t want to find daily schedules at the State House, research copies of every piece of testimony submitted at every public hearing, track the status of a particular bill, find contact info for committees, or House members, or senators, or listen to public hearings on the computer, or watch selected State House proceedings on MPBN’s Capitol Connection. But if you do, just follow the links. The State House is increasingly accessible to the public, at least to those who put in a little work.

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Feedback: What do you think? We’d love to have your thoughts on anything you’ve read here, or other topics that are important to you. The more you talk to us, the better we’ll represent your views. Send an email to share your feedback with me — and thank you!

Partners for Progress Policy Updates from the Portland Regional Chamber are supported by generous contributions from our Partners for Progress. For more information about joining the Portland Regional Chamber just click here.

 

http://bangordailynews.com/2013/05/13/business/tax-reform-needs-to-include-government-restructuring/ printed on September 30, 2014