Lawmakers want your money, and they never stop wanting your money. At any given opportunity, they will dream up new ways of identifying it, taking it from you, and then using it. When they can’t get it, they just take it from you anyway by spending money they don’t have and covering it with debt.
The 129th Legislature, unsurprisingly, was a master class in legislative dreams of taking more of what you earn.
We had proposals for new payroll taxes to fund a massive, ill-considered paid leave bill. We saw proposals for increases in a plethora of sin taxes. We had gas tax increase proposals. And we had a proposal for the rebirth of the 3 percent tax surcharge.
And then there was LD 1254, “An Act To Authorize a Local Option Sales Tax on Meals and Lodging and Provide Funding To Treat Opioid Use Disorder.”
The bill would give Maine cities and towns the power to enact a 1 percent tax on meals and lodging within their jurisdictions.
Fortunately for Mainers, this bill — LD 1254 — was tabled, and not passed in the first session of the Legislature.
But it will be rearing its ugly head in the second session.
Proponents of the bill — as they always do — make a lot of grand claims about how essential and important the “funding mechanism” for local government is in this bill. It will help improve local services, they say, and best of all it will reduce property taxes!
I think most of us have enough experience with government to know how specious those arguments are.
Right now, every municipal government in the state is packed with people who have ideas. Those ideas cost money. More money than towns have.
If you told every town in this state that they had an unlimited pile of money to work with, and asked them what they’d like to do with it, each and every one of them would spend significantly more money than they currently do.
In other words, their wants vastly outstrip their ability to pay for those wants.
What do you think would happen if you suddenly gave a municipality a bunch of money that they didn’t have yesterday? Do you think they would use it to give a corresponding cut to their town’s property tax? Or do you think they might start putting check marks next to all those great ideas they have?
I think you and I both know what nearly all municipalities would do. Particularly given that nothing within either existing statute or the proposed language of LD 1254 would actually require municipalities to use the new money to lessen property taxes.
More importantly, though, for the very marginal benefit it would actually be to most municipal governments, it would actually be most hurtful to the exact people we most want to help in the state.
According to a new study published by The Maine Heritage Policy Center, a free market policy think tank where I serve as the chief executive officer, roughly 12.9 percent of Mainers live in poverty, and six of the 10 municipalities that have the most to gain from this proposal also have poverty rates that exceed the state average.
It is these low-income families that will be most impacted by an increase in these types of taxes. Sales taxes are universally recognized by both conservative and liberal economists alike as regressive in nature, in that they hurt lower-income individuals more than others.
And that doesn’t even get into the impact — particularly on border areas in Maine in Oxford and York counties — that the additional tax will have on Maine business. It would work to depress economic activity, and incentivize cross-border shopping in New Hampshire.
So keep an eye out, folks, because Augusta is once again searching for a way to take more of what you earn, and they’re going to try really hard to actually pull it off this time.
Matthew Gagnon of Yarmouth is the chief executive officer of the Maine Heritage Policy Center, a free market policy think tank based in Portland. A Hampden native, he previously served as a senior strategist for the Republican Governors Association in Washington, D.C.