AUGUSTA, Maine — In a mostly party-line vote, lawmakers on the Legislature’s Taxation Committee on Wednesday rejected a proposal by Republican Gov. Paul LePage that would ask Maine voters to repeal the state’s income tax by 2020.
The proposal by LePage seeks to send a ballot question to Maine voters this November that would amend the state’s constitution to repeal the state income tax. But on a 7-5 vote, with six Democrats and one independent joining forces, the committee voted to recommend against the bill.
Rep. Adam Goode, D-Bangor, House chairman of the committee, said unlike LePage’s current two-year budget proposal, which seeks to reduce the state’s income tax by offsetting the revenue lost with a rate increase and expansion of the state’s sales tax base, the governor has not said how he would pay for completely eliminating the income tax.
Democrats argue that doing so would punch a $1.7 billion hole each year in the state’s $6.5 billion two-year budget.
“I do not think it’s the full story to say we are going to cut $1.8 billion from the state budget and not have it come out of K-12 education or cause property taxes to go up,” Goode said. “It’s disingenuous for legislators to lead people on that there is not another side to this story.”
But Republicans in the minority on the committee said Democratic concerns were being overblown and that the Legislature would find a way to balance the state’s budget.
Sen. Paul Davis, R-Sangerville, said the move to eliminate the income tax was the kind of “bold” change Maine needed to help the state’s long-flagging economy.
“I believe that sometimes you have to take a risk,” Davis said after he detailed Maine’s low national ranking as a place to do business. “Our economy in northern Maine is in the doldrums and we have witnessed a downward spiral for years and years and years.”
Other Republicans on the committee agreed, saying to maintain a status quo on Maine’s tax policy was a prescription for continued economic stagnation.
Republicans also argued that voters deserved the opportunity to make the call as the Legislature has been notoriously ineffective at crafting tax policy reform in Maine.
“I always came down to the bottom line of the people are going to vote on it and that’s where the decision should be made,” said committee Senate Chairman Earle McCormick, R-West Gardiner.
Democrats flirted briefly with amending the referendum language so it would reflect to voters that eliminating the income tax in Maine came at the expense of making huge cuts to other state-funded programs and would result in property tax increases.
“I would be inclined to support this bill if we amended the referendum to reflect that reality,” said Sen. Nate Libby, D-Lewiston. “Mainers can choose to eliminate the income tax if they are in favor of cutting funding for roads and bridges, K-12 education and in favor of paying increased sales taxes and property taxes.”
The bill, which calls for a legislative resolve to put the ballot question before voters, next will go to the full Legislature for consideration, where it would need to gain two-thirds support in both the House and Senate in order to be placed on the ballot.
Senate President Mike Thibodeau, R-Winterport, expressed disappointment in the committee vote and vowed to continue advocating for the proposal.
“I hope when this bill goes before the full Legislature it will be embraced by both sides of the aisle as a commonsense reform that will lead to a stronger economy for Maine,” he said in a prepared statement.
LePage also expressed his dissatisfaction with the committee vote.
“I urge people to demand to know why their legislators don’t want you to have a say in the process.” LePage said, listing the names and contact information for committee members who voted against the measure.