November 23, 2017
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Democrats’ budget plan offers lawmakers a chance to show voters they’re listening

By The BDN Editorial Board
BDN PHOTO ILLUSTRATION BY ERIC ZELZ | BDN | BDN
BDN PHOTO ILLUSTRATION BY ERIC ZELZ | BDN | BDN
Property tax rates in Maine rose by more than 25 percent between 2005 and 2015.

As lawmakers in Augusta work to draft a budget for Maine for the next two years, they have a stark choice before them. Gov. Paul LePage offers a gloomy vision for Maine’s future that continues to cut services to those who need help in getting ahead so he can fund more income tax cuts. Democrats in the Legislature, meanwhile, are pushing for investments in education and Maine people while offering significant property tax relief.

The governor’s two-year budget plan, like those from previous years, seeks to further reduce support for many of Maine’s most vulnerable residents while pushing more and more financial responsibility onto the state’s cities and towns. It also includes ideas — such as moving Maine to a flat tax, effectively taxing nonprofit entities and eliminating municipal revenue sharing — that lawmakers from both parties have rejected in past years.

Maine residents and taxpayers deserve better than the same stale and punitive ideas year after year as the state’s workforce shrinks and child poverty rates, overdose deaths and property taxes rise. The Democrats’ Opportunity Agenda offers a positive vision and a roadmap for helping Maine people, especially young people, get ahead. In contrast to LePage’s budget full of unnecessary and damaging cuts, Democrats have put forth a plan that actually responds to Maine’s problems.

Property tax relief is an especially important piece of their plan. Democrats would increase the homestead exemption by raising from $20,000 to $30,000 the residential property value that would be exempt from property taxes. In contrast, LePage would limit the homestead exemption to homeowners over the age of 65, thereby raising property taxes for everybody who’s younger.

The Democrats’ plan would also increase the Property Tax Fairness Credit, a state income tax credit that refunds some of the property taxes or rent paid by low- to moderate-income residents. It also increases revenue sharing, which would take some of the burden off of municipal budgets, though the Democrats’ plan still falls short of restoring revenue sharing to the funding level required by state law.

Statewide, property tax rates rose by more than 25 percent between 2005 and 2015, according to Maine Revenue Services. Maine’s property taxes were the 17th highest in the country in 2015, as measured by the mean effective property tax rate by the Tax Foundation.

Towns have been forced to raise property taxes to make up for the state’s shortfall in education funding and to compensate for a loss in revenue sharing funds in recent years. Proposals in the LePage budget to eliminate state funding for General Assistance, a last-resort source of support for the poor; to further limit the amount of time low-income families can receive Temporary Assistance for Needy Families (TANF); and to cut even more low-income people off the state Medicaid rolls would add to the strain.

Bangor, for example, has already seen requests for General Assistance rise in response to the LePage administration’s past state cuts to TANF and Medicaid. This shows that the need for this temporary help does not go away when the state cuts services; municipalities (and hospitals) pick up the tab instead.

There has been a similar shift with education funding as the state has failed to meet its requirement to fund 55 percent of school costs, as approved by voters in 2004. In November, voters approved a 3 percent surtax on incomes over $200,000 to increase education funding. The surtax is already in effect and being collected.

The Democratic plan would keep it.

Many Republicans in the Legislature are opposed to the surtax and want it repealed. LePage’s budget would delay it for a year while also shifting the cost of school administration to local taxpayers.

The Opportunity Agenda also includes new investments in the state’s community colleges and seeks to expand Head Start and help younger Mainers pay off their student debt. The plan is funded through revenue growth and new taxes collected on online purchases and expected tax revenue from the sale of marijuana.

If there’s one message to take from November’s vote in favor of Question 2, it’s that voters have had enough in recent years of the state shifting costs to local governments, which have in turn had to raise property taxes.

Lawmakers should heed this message. Democrats have offered them a way to show they’re listening.

 


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