AUGUSTA, Maine — Gov. Paul LePage sought to justify the sweeping tax reform proposal he is pushing during an appearance Wednesday on Maine Public Broadcasting Network’s “Maine Calling” radio show.
It was LePage’s first “Maine Calling” appearance and, spurred by Maine Public Broadcasting Network’s Jennifer Rooks and Mal Leary along with several callers, it was the longest and most detailed defense the governor has launched of the two-year budget proposal he unveiled on Jan. 9.
“I’ll give you an example” has become one of LePage’s most-used catchphrases, and his radio appearance Wednesday was no exception.
LePage says he wants to eliminate the income tax in three steps, but he didn’t give a timeline.
— Asked what his top goal is this year, LePage said that “having the Maine people and the Legislature realize that the only chance to prosperity in the future is to go after the income tax.”
— Reducing Maine’s top-tier income tax to 5.75 percent, as LePage proposes, would fully kick in during the 2018-19 biennium and reduce state revenues by $1.2 billion, according to estimates from the administration.
— According to the Tax Foundation, which relied on 2011 data, Maine raises about $1,070 per capita from the income tax, which ranks Maine 11th-highest in the United States.
— In the current fiscal year, Maine is expected to raise about $1.45 billion from the individual income tax.
— As an example, LePage said under his tax plan, a family of two public school teachers and two children would receive a 40 percent income tax decrease worth at least $1,500 annually. While this kind of calculation is simple, determining the overall effect of LePage’s tax reform proposals is much more difficult, especially when it comes to the effect on property taxes, which are assessed at the local level.
How is LePage’s plan different from the ones that failed in the past?
— LePage is the first governor in recent memory to actively support — and in his case, propose — a major tax reform package.
— LePage said on the radio show that past efforts have been revenue neutral and sought to “shift” Maine’s tax burden to seasonal residents and tourists. His plan is about eliminating the income tax and refining the state’s tax code in a way that reduces the aggregate amount taxpayers pump into state coffers and makes Maine more attractive to would-be residents and businesses.
— “I’ll give you an example”: The city of Waterville, where LePage is the former mayor, receives about $1 million per year in state revenue sharing, which the governor seeks to cut statewide by fiscal year 2017. Waterville residents collectively pay about $18 million in income taxes, according to LePage.
“You pay $1 million more in property taxes, and I’ll put $17 million back in your pockets,” he said. “Anyone that I know in my arena would say that an 18-for-1 trade is a pretty good trade. Even at Marden’s they call that a good trade.”
LePage said his massive tax cuts won’t affect services if the state, schools and municipalities practice “fiscal responsibility and tough management.”
— The governor’s opponents say that the tax cuts, if enacted this year, would have their full effect in three and four years, which means LePage is proposing tax cuts without finding ways to balance them with the cost of future services.
— LePage said “there’s no possible way” for state funding for K-12 education to reach 55 percent of the total cost, a concept that was put into law by Maine voters in a 2004 citizen referendum but which has never been achieved by the state.
LePage continued his tough talk about Maine’s public schools and higher education.
— LePage said the education system is hampered by “abuse and waste” but gave no examples other than decrying the fact that some teachers are forced to buy classroom supplies with their own money.
— He said one way to reduce higher education costs, particularly in the Maine Community College System, is for Maine’s high schools to reduce the percentage of students who need remedial work when they start college. LePage said 50 percent of Maine Community College System students need remedial work. That figure is accurate for students going directly from high school to community college, though the overall number when older students are taken into account is much lower, according to a 2012 BDN analysis.
— “Last I looked, Maine was ranking somewhere in the 30s in education,” said LePage. “Massachusetts, who was No. 1, is now down to eighth.”
The governor didn’t cite a source, but the Education Week Quality Counts 2015 State Report Card ranked Maine 13th in the country for overall academic achievement of K-12 public school students. Massachusetts ranks first. It also ranked Maine higher than Florida, a state LePage touted in his inaugural address and again Wednesday as zooming up the state rankings for education quality by eliminating administrators.
LePage said people who earn below the federal poverty line need the ability to buy insurance on existing private insurance exchanges.
— This comment from LePage is likely to garner some attention: “These people are either not working, working just partly, and a lot of them are very ill people in the first place. Those are the folks we need to have an answer for.”
— The state of Maine is in the midst of a lawsuit in which the state claims it legally cut some 19- and 20-year-olds from the Medicaid rolls, despite a “maintenance of effort” provision in the federal Affordable Care Act that prevented it. LePage said that’s akin to penalizing Maine for being generous about allowing people into the Medicaid program in prior years.
— LePage and Republicans have turned back efforts to expand Medicaid under the Affordable Care Act five times in the past four years.
— LePage said a major part of the solution is lowering taxes and increasing Mainers’ overall earning potential, so they can afford private health insurance.
LePage supports loosening vehicle inspection requirements and maintaining vehicle excise taxes, but not selling cars on Sundays.
— In response to a question from a Maine Public Broadcasting Network listener, LePage said he favors allowing owners of late-model cars to have them inspected and registered every two or three years. He also said that because the vehicle excise tax is a local tax, efforts to repeal it should begin at the local level.
— “There are bigger fish to fry right now than getting car dealers open on Sunday,” he said.
LePage continues to have a contentious relationship with legislators.
— During Wednesday’s show, he criticized lawmakers for blocking initiatives he said would make Maine more prosperous. Democratic House Speaker Mark Eves of North Berwick says the governor is ignoring key facts.
“Maine people can count on Democrats to make sure the budget is fair,” said Eves in a written statement. “We will be at the table working with Republicans and the governor to ensure that the budget protects middle class families, our seniors and our schools, while ensuring our economy grows from the middle out.”
We’re sure to hear more from LePage on these themes, and soon. He is scheduled to deliver his 2015 State of the State address on Tuesday evening at the State House.