GUEST COLUMN

Realities of the proposed state budget

Posted April 08, 2011, at 8:25 p.m.

So far, the debate about Gov. Paul LePage’s proposed budget tends to center on anecdotal evidence and personal investment rather than facts. It is important to look at the facts of how this budget affects Mainers. As Rep. Mark Eves said when discussing the budget as part of the Democratic radio address March 11, “We are entitled to our own opinions but not our own facts.”

As with any budget cuts, there are painful choices to be made, and, as LePage says, it will require “shared sacrifice.” Let’s examine how LePage’s vision of “shared sacrifice” accomplishes reducing the budget.

The budget eliminates property tax supports, resulting in the loss of more than $400 in assistance to more than 75,500 Mainers. Reductions in General Assistance funding to municipalities and a 32 percent reduction in revenue sharing result in more than $90 million being shifted into municipal taxes, principally onto middle-class Mainers.

About 25,000 seniors will lose all or some support they currently receive in paying their premiums, co-payments and deductibles for Medicare parts B and D, as well as the cost of prescription medications.

There will be a 10 percent reduction in the Business Equipment Tax Reimbursement program, which adversely affects rural Maine and will result in significant job losses here.

His budget proposal also includes myriad cuts to other programs that assist not only the poor but programs used to offset costs for working-class Mainers. In addition, this budget would result in the loss of health insurance for thousands of Mainers who currently are insured.

Going through these issues point by point, a trend begins to emerge. All of the increases affect only the poor and working-class Mainers, with significant adverse effects on low-income seniors and children.

What are these reductions for? The budget includes $203 million in tax breaks. Here is a look at how Mainers of different income levels benefit: Low-income earners and middle-income earners will see tax breaks of about $6 and $83, respectively. High-income earners will see tax breaks of around $874 dollars. The highest income earners (more than $360,000) would see maximum income tax breaks of around $2,770. Ninety percent of Mainers are low- to middle-income earners. With full implementation, 80 percent of the tax breaks go to earners making more than $119,783 per year.

What do the total savings amount to for Maine taxpayers? This budget is $500 million larger than the last one. A half-billion-dollar increase to Maine taxpayers is the cost of these cuts to 90 percent of Mainers and handouts to the other 10 percent.

Now, let’s look at some of the things the governor has said about this budget. We will all “share the sacrifice” and “feel the pain.” Not true. As a matter of fact, LePage exempted his salary from the increase in public employee contributions. (He has since said he’d reconsider.)

The “pain” will be felt by the working people of this state, who are paying the bills for everyone. It will be felt by the homeowner who gets his extra $83 in income taxes while paying his additional $400 in property taxes.

No cuts create any significant adverse effect on the wealthy, yet they are reaping the significant brunt of benefits. Why? The excuse being given is that by giving money to the wealthy, you stimulate economic growth.

This isn’t true. If a working family gets a tax break, they buy the things they need and pay their bills. These things all stimulate economic growth. If the richest among us get a tax break, it goes into an account, not the economy.

We’ve tried trickledown economics before, and it resulted in the collapse of our economy and the outsourcing of our jobs. It simply doesn’t work.

Gov. LePage stated, “We will lower the top income tax bracket from 8.5 percent to 7.95 percent, its lowest level since 1975. This budget provides real tax relief to struggling families and begins the process of making business success more affordable in Maine.” Anyone can see the absurdity of this statement, as lowering the top income tax bracket in no way benefits struggling families.

The bill for $90 million in new taxes is not going to come with an Augusta return address. It will come from our town offices.

Many people will be placing their anger at these tax increases in the wrong place. They will be blaming their local town managers, when the culprit for these tax increases is the governor and the Legislators who are supporting this budget.

Gov. LePage promised to “put people before politics,” and we have at last come to one promise that he has kept. He has certainly put Maine’s wealthiest people first.

Troy Haines is the chairman of the Aroostook County Democrats. He can be reached at gyre1976@yahoo.com.

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