AUGUSTA, Maine — One of the distinguishing features of Republican Gov. Paul LePage’s $6.57 billion biennial budget proposal is that neither political party embraced it or wholeheartedly rejected it in the more than two months since he unveiled it.
That all changed this week when Maine Revenue Services released an analysis that details financial impacts of the major components of LePage’s budget. Though there have been criticisms launched by individual lawmakers, the MRS report triggered the first unified attack from legislative Democrats, the Maine Democratic Party and the left-leaning Maine People’s Alliance.
Not long after the report became public on Monday, Democrats in the Legislature and the Maine Democratic Party used it to criticize LePage’s tax reform proposal as a give-away to wealthy Mainers.
Their salvos continued Tuesday. Using St. Patrick’s Day for inspiration, more than 120 supporters of the Maine People’s Alliance converged on the State House to argue that LePage’s budget — specifically the tax reform package within it — benefits wealthy people far more than it does the middle or lower class. They threw fake gold coins — on which they wrote their addresses and state spending priorities — into a black pot and delivered it to LePage’s office.
“Mainers protest Gov. LePage’s ‘Pot of Gold’ for the Wealthy,” read a headline on a MPA news release Tuesday. Neither the group nor members of the Legislature provided any detailed alternative to LePage’s budget proposal.
In the past, Democrats have favored various tax reform proposals that sought to reduce the income tax while increasing and broadening the sales tax, but that’s not the case this year. They’re focused on who wins in the budget and, more importantly, the effects of the proposed tax cuts two years from now, in the next biennium, on education funding, social services and state government in general.
“It will sabotage our middle class, our economy, our ability to invest in schools,” said House Speaker Mark Eves, D-North Berwick, in a news release. “You know, if you make over $175,000 a year, it might be a good deal for you, but for the rest of us, it’s a bad deal.”
Rep. Matt Moonen, D-Portland, a member of the Legislature’s Taxation Committee, said Tuesday that he and other lawmakers have had reservations about the budget proposal but opted to wait until they received numbers from Maine Revenue Service.
“We simply needed more information about what the tax reform package was going to do,” said Moonen.
The argument that the wealthy will benefit more from LePage’s proposals echoes what Democrats were saying in 2011 when LePage and Republicans pushed through an income tax rate decrease that eliminated the income tax for some of the state’s poorest people.
The MRS analysis released Monday found that lower-income earners would benefit more from the standpoint of the percentage of their income they pay in taxes, though higher earners would benefit more in actual dollars.
The analysis shows that the net effect of the proposed income, sales and property tax cuts would save Maine residents with earned income of $40,000 a year $145 annually after all of LePage’s proposals are fully in effect. Someone earning $400,000, by contrast, would see his or her taxes reduced by nearly $10,700 annually.
Senate President Mike Thibodeau, R-Winterport, said Tuesday that Republicans have been quiet about their thoughts on the budget because they’re awaiting reports from the Taxation Committee, whose recommendations are due April 1, and the Appropriations Committee. He signaled Tuesday that the budget lawmakers eventually agree on will include changes to LePage’s plan.
“There’s no working group creating an alternative budget plan,” he said. “When I met with the folks on our tax committee, the discussion surrounded, ‘Don’t go down there and craft a tax plan that you like or personally think is the best. Craft something that you can convince two-thirds of the people [in the Legislature] is the right way to go.’”