The Maine Republican Party should have no problem gathering signatures for a referendum seeking to eliminate the state’s income tax. Who isn’t in favor of paying less in taxes?
What will be missing from the signature-gathering effort — and subsequent ballot question — is a tally of what government services would be eliminated or what other taxes would be raised to offset the loss of nearly half the state’s annual general fund revenue.
Without this balance sheet, an effort to eliminate the state income tax is just an easy, disingenuous political rallying point.
The Maine Republican State Committee, which met over the weekend, unanimously passed a resolution authorizing the party’s Chairman Rick Bennett to “dedicate and deploy any and all party resources he deems necessary to support Maine voter referenda to phase out and eliminate the Maine income tax, as well as to support substantive welfare reforms that the vast majority of Maine people demand.”
“Maine families should have the right to keep more of what they earn,” Bennett said in a statement. “Maine’s oppressive income tax discourages investment, stifles opportunity and kills jobs.”
Maine’s income tax rates are high — 12th highest in the nation for the top rate, according to the Tax Foundation. The rates would be lowered under the budget passed late last month by lawmakers but not nearly as much as Gov. Paul LePage and many Republican lawmakers wanted. When it became clear his proposal for bigger income tax cuts — and an increase and expansion of the sales tax — was not going to pass the Legislature, LePage began championing a referendum to eliminate the state’s income tax. He also pledged to “spend the rest of my days going after those people,” referring to lawmakers who oppose his plan to reduce and ultimately eliminate the income tax.
Near the end of the state budget debate this spring, the governor’s office released a list of programs that could be cut to cover the cost of his proposed income tax reductions. The governor didn’t necessarily endorse such cuts, many of which would face stiff opposition and, in fact, already have. If all the proposed cuts were to be enacted, they only would have added up to $133 million of the nearly $150 million in revenue that would be lost from his plan for Maine’s next two-year state budget.
If the governor’s office can’t cover $150 million in lost revenue, it certainly can’t find enough cuts to make up for the elimination of $1.5 billion, the amount the income tax brings in each year. That means the costs would be shifted elsewhere, likely to local property taxes.
Maine has and expects a lot of government — not bureaucrats sitting in offices but services and infrastructure paid for through tax dollars. For example, Maine has 1,392 lane-miles of state-owned roads for every 100,000 residents. That’s twice what New Hampshire has, a third more than Vermont and nearly 10 times as much as Massachusetts.
Maine also has more schools and school administrators than many other states. So per-pupil spending, which is a mix of state and local dollars, is higher than average. Maine ranked 23rd in the country for the number of schools in the state in the 2013-2014 school year but 44th in terms of school enrollment, according to data from the National Education Association.
Mainers — who are spread across a large, mostly rural state — expect a lot from their government, all of which must be paid for. If, as the GOP and LePage want, the income tax is no longer the source for much of that funding, they must come up with alternative sources or dramatically pare back what state government can do.
All of it should be part of the question they seek to get on the ballot.