Maine Governor Asks Lawmakers a Billion Dollar Question

A semantically bold press release posted by the Office of Gov. LePage asks “The Billion Dollar Question: Will You Support Eliminating the State Income Tax?"

The press release refers to a letter the governor recently sent to state lawmakers proposing a constitutional amendment to eliminate the income tax. He asserted that the “path to prosperity for Maine is a future with no state income tax,” which he gleaned from his conversations with constituents in town hall meetings over the last few months.

In January, the governor released his $6.5 billion fiscal year 2016-17 budget proposal, which seeks to gradually reduce the income tax burden by 2019 despite the budget’s inclusion of a recommendation by the Revenue Forecasting Committee to increase income tax revenue through 2017. In fiscal years 2016 and 2017, the budget calls for a reduction of income tax revenue by $176 billion and $546 billion respectively.

At the time of the budget’s release, the Bangor Daily News summarized additional key components, like reduced corporate income tax rates, a broader, higher sales tax, and elimination of the home mortgage deduction, among other things.

Gov. LePage also wants to accomplish the following through the budget proposal:

• Eliminate certain state jobs, most of which are currently vacant, which would increase the attrition rate from 0.6 percent to three percent in the next two years, and save approximately $10.8 million;
• Help school districts consolidate their administrations by providing $5 million statewide in both fiscal year 2016 and 2017;
• Reduce state funding for teacher retirement costs by about $35 million in fiscal year 2016 and $31 million in fiscal year 2017;
• Spend about $1.1 million to create a new system to collect liquor excise taxes; and
• Help people suffering from mental illness with $13 million in new money for the Bridging Rental Assistance Program, $11.6 million for funding programs required by the state’s mental health consent decree, and more than $30 million over the biennium to eliminate waitlists for Section 21 Tier II and III home- and community-based services, plus additional new funding to reduce service waitlists for adults with autism and brain injuries.

Reuters reported Gov. LePage’s idea to amend the Constitution would require authorization by two-thirds of the legislature, and if approved, would make Maine the 10th state to partly, or entirely, eliminate income tax. Most democratic lawmakers oppose complete elimination of the income tax, though they do support lower income and property taxes. House Speaker Mark Eves declared that "Maine's economy is at a crossroads. Our tax system is broken. It's rigged for those at the very top. The governor's proposal will make it worse."