Maine votes to hike tax on high earners to boost school aid

Posted Nov. 09, 2016, at 1 p.m.
Last modified Nov. 10, 2016, at 9:19 a.m.

BANGOR, Maine — Question 2, which sought to tax high-earners for the benefit of Maine’s public schools, has emerged victorious.

Question 2, also known as the Stand Up For Students campaign, is the result of a citizen-initiated petition that was certified as successful by Secretary of State Matthew Dunlap in March of this year.

Backed by the Maine Education Association, the union that represents the state’s public school teachers, the initiative intends to raise approximately $157 million a year for public schools by imposing a 3 percent surcharge on Maine income above $200,000 per year.

“It’s amazing to think that over 300,000 Mainers are telling us we need to fund our schools better and that we need the wealthy to pay their fair share of taxes,” said John Kosinski, who led the Yes on 2 campaign. “That’s going to make public education in Maine stronger. Even the opposition to Question 2 agreed that we are underfunding our public schools.”

The referendum proposes to create a dedicated account for the revenues, which would be targeted to classroom instruction — not infrastructure or administration — in an effort to bring state government’s contribution to the total cost of public K-12 education in Maine to 55 percent. Opponents have dismissed the dedicated account as impossible to maintain because each new legislature must approve state government’s two-year budgets, which include state aid to education.

Opponents of Question 2 see the surtax as destructive to Maine’s efforts to attract businesses and professionals who would be hit by the new tax, such as doctors and dentists. The surtax would put Maine’s top income tax bracket among the highest in the country at 10.15 percent.

Opponents also have argued that the referendum could have mixed results for Maine schools because the flow of money through the state’s funding formula accounts for municipal property values and not necessarily the prosperity of residents in any given school district.

Matthew Gagnon, CEO of the conservative Maine Heritage Policy Center, said the tight vote “throws cold water on the idea that this was some sort of a mandate” and that voters are “almost entirely divided” on the idea.

He said it sends “a signal to the Legislature” to pass tax reform, saying it could cause massive damage to Maine’s business climate.

“We’d better have a lot of heartburn about that and do something to fix it,” he said.

Support for Question 2 came from a number of advocacy organizations and labor unions, including the MEA, the Maine People’s Alliance, the Maine Children’s Alliance and the Maine Small Business Coalition.

Opponents include LePage, former Democratic Gov. John Baldacci, the Maine State Chamber of Commerce and several business groups.

Lincoln resident Ryan Larson was among Question 2’s opponents. Besides not having anyone he knew who would benefit from the idea, the 25-year-old said he thought the idea fundamentally unfair.

“I think it [the cost of public education] should be spread equally,” Larson said. “Just because you make more money does not mean that you should pay a higher tax.”

Camilla Doak of Bangor said she voted no on Question 2 despite being a professional educator.

“I think people are taxed to death,” Doak said. “If you are fortunate enough to make $200,000 then they should be left alone.”

But to Tera Williams, 23, of Bangor, the issue is straightforward.

“The people who have more should be taxed more,” she said.

BDN writer Michael Shepherd contributed to this report.

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