What you should know about the Cutler property tax relief plan

Today, Eliot Cutler released a plan for providing property tax relief to Maine residents. The center piece is a dramatic increase in Maine’s homestead exemption program, elimination of revenue sharing as we know it, and a new approach to channeling revenue collected by the state to towns and cities.

The basic premise is that Mainers increasingly feel the bite of property tax increases and that our current three pronged approach to mitigating these increases – a modest homestead exemption, revenue sharing, and a program that provides targeted relief for low- and moderate-income Mainers – is no longer working.

What the Culter plan fails to acknowledge is that the primary reason these traditional approaches are falling short is because, with the exception of the homestead exemption, these programs have been gutted to pay for the 2011 income and estate tax cuts passed by the LePage administration and his legislative allies and to shore up critical services in the wake of a revenue collapse brought on by the Great Recession. Reforming a system that is inadequately funded to begin with amounts to little more than rearranging the deck chairs on a sinking ship.

This leads to my second concern with the Cutler plan. Rather than acknowledge why the current system is failing more and more Mainers, the proposal opts instead to address existing revenue shortfalls by increasing sales taxes in a variety of ways. Contrary to Cutler’s claim that Maine’s most regressive tax is the property tax, analysis (see p. 27) by Maine Revenue Services confirms that sales and excise taxes on consumers are the most regressive taxes. If tax fairness is truly a high priority then we should be looking instead to the income and estate tax and/or to closing the door on ineffective tax loopholes as a primary source of funding. If sales taxes are going to be increased or expanded to services, then those changes must be accompanied by an aggressive tax credit to offset the impact on low- and moderate-income residents. LD 1496, the sweeping tax reform proposal designed by Senator Woodbury last year, included such a credit.

I am further troubled that the only mention of the most targeted and effective way to provide property tax relief – the Property Tax Fairness Credit – is as a source of revenue to pay for the plan. While it is true that an expanded homestead exemption means that fewer people will claim the Property Tax Fairness Credit (PTFC) resulting in a savings for the program, we should use any additional revenue to bolster the existing PTFC for those who need it most. This includes renters who get little if any relief from the expanded homestead exemption and may face even higher rents if their landlords see property tax increases and pass on those costs to their tenants. It also includes families who lost more than two thirds of the property tax relief they received previously under the old Circuit Breaker program before it was eliminated and converted to the PTFC.

The Cutler plan puts some important ideas on the table that merit further consideration. Expanding the homestead exemption makes a lot of sense as a way to shift some of our tax burden to seasonal homeowners and encourage residency. The argument that the current revenue sharing program does little to export taxes or ensure that the wealthiest among us are paying their fair share is a sound one. However, the plan’s design does not consistently reflect Cutler’s expressed concern for tax fairness across income groups and for economically vulnerable groups of Mainers. We can grow Maine’s economy and secure adequate revenue to make the kinds of investments in Maine’s people and communities that will help us do so. The Cutler plan is a thoughtful and detailed starting point for conversation on how best to do this. This is a conversation we look forward to engaging in over the coming weeks and months.

Good news, bad news

Maine state government ranked above average for its sound budgeting practices in a report released yesterday by the Center for Budget and Policy Priorities. But, while Maine is better than many states at fiscal planning, there’s more we can do, especially around evaluating tax breaks for lucrative out-of-state corporations.

The good news: On a scale of 10, Maine ranked 7 for doing prudent things like producing an independent forecast of state revenues, generating regular budget status reports, having nonpartisan staff review and analyze the budget and other spending bills, and providing for well-designed rainy day funds.

The bad news: Maine does not sufficiently scrutinize its business tax expenditures, things like tax credits, deductions, and exemptions that reduce state revenue.[1] Maine spends more than $11 million a year to give income tax credits or exemptions to companies that buy business equipment, that locate and create jobs in certain designated Pine Tree zones, that perform research on new technology, and whose income falls under foreign jurisdictions (tax havens). These tax giveaways cost Maine’s taxpayers money just like spending for schools or road construction. Yet they receive little or no scrutiny.

As one former legislator and member of the Appropriations Committee Lisa Miller said recently, legislators pour over every part of the state budget with a fine-toothed comb to find savings but conduct virtually no oversight of the millions in revenue lost to tax expenditures.

According to the Center,

The more that states spend on tax expenditures, the less they have for direct spending programs, or for reductions in tax rates. This trade-off should be made explicit in order for a state to plan wisely for the future. Yet often it is not.

What’s more, policymakers have largely ignored a report from Maine’s Tax Expenditures Review Task Force. The task force, created at the behest of the legislature in 2013, examined the revenues the state forgoes by sanctioning tax subsidies. They recommended establishing an ongoing, independent review process to evaluate the effectiveness of tax expenditure programs, placing caps and other limitations on some programs, and eliminating some programs.

While Maine spends millions to benefit corporations more Mainers are suffering from homelessness and hunger. The least our leaders could do is periodically review whether these tax break programs are delivering on their promises to boost Maine’s economy or simply taking resources away from other high priorities.



[1] According to the report other things Maine could do to improve its fiscal health are: produce spending forecasts of what state programs will cost into the future, analyze the budget impact of spending bills beyond the current two-year budget, improve pension oversight, and show state budgeters (in the budget document) estimates of what it will cost to deliver the same quantity and quality of services to residents it is delivering currently so that they can better understand how changes to that budget would affect public services.

Question 3 – Maine’s aged bridges need repair

You know the old line, “In Maine, driving is better in the winter because the potholes get filled with snow.” Mainers have always grumbled about road conditions.

It turns out we have something to complain about. Only it’s our bridges. Maine ranks 9th in the country for the worst bridge conditions. Of our 2,408 bridges, 356 or nearly 15% have structural defects.

When Mainers go the polls on November 5, they can vote to approve Question 3, $100 million in bonds for transportation improvements including $27 million to repair and replace defective bridges across the state.

Many of the most serious problems are in Maine’s most rural areas. Piscataquis County has the most deficient bridges (24%) with Washington (21.6%), Knox (21.3%), Hancock (206.6%), and Oxford (20.6%) counties following close behind. To learn which bridges near you are in need of repair, visit Transportation for America’s web site.

Percent of Deficient Bridges in Maine by County

Source: Transportation for America, The State of our Nation’s Bridges, 2013

Maine’s bridges are aging.  The average Maine bridge is 50 years old. The average deficient bridge is 69 years old. In 10 years, one out of four of our nation’s bridges will be 65 years or older. Every year that passes, these deteriorating spans become more costly to repair.

The good news is that Maine has improved its bridge condition standing since 2011, reducing our inventory of deficient bridges by 33. The bad news is, we have a long way to go.

State Rank among 50 states 2013 % deficient Total bridges Deficient bridges 2013 Deficient Bridges 2011  Change in deficient bridges over 2011 Percent change in deficient bridge total Average daily traffic on deficient bridges
Maine 9 14.8 2,408 356 389 -33 -8.5% better 924,423

Source: Transportation for America, The State of our Nation’s Bridges, 2013

Our bridges are our lifeline to national and international markets. Billions of dollars in goods are trucked over these deficient bridges every year. Almost 1 million people cross them every day.

The Maine Department of Transportation routinely monitors bridge conditions. It is not likely that a bridge will collapse. MDOT will close it before that happens, as experience shows with the Bucksport bridge in 2006. But without funding for ongoing repairs, Maine’s aged bridges will continue to deteriorate. At best the department will impose weight limits; at worse it will close unsafe bridges,  causing delays and costly, inconvient detours for commuters, truckers, emergency responders, and school buses.

Bridge

Maine needs sound, safe bridges, along with roads, rail lines, and cargo and airports to sustain its economy. Spending on transportation projects will also create jobs, boost the local and state economies, and enhance Maine commerce. Voting yes on Question 3 is an investment in Maine’s future.

When small is mighty BIG!

IFA poster 10-18-2013Robert Reich is short, four feet, eleven inches to be precise. I mention his height because the former labor secretary and current professor at the University of California Berkeley makes it an integral part of the presentation in his thought provoking new documentary, Inequality for All, currently showing at Railroad Square Cinema in Waterville.

When Reich speaks about the ever-widening income gap in America between the uber-rich and the rest of us, he towers over his subject matter and rivets the attention of his audience.

Yes, the film is filled with powerful data. A few examples:

  • The richest 400 Americans have more wealth than the bottom 150 million Americans combined.
  • In 1970, the top 1% of earners took home 9% of the nation’s total income. Today, they take in approximately 23%.
  • In 1978, the typical male American worker earned $48,302 while a male in the top 1% earned $393,682. In 2010, the typical American male earned $33,731 while a male in the top 1% earned $1,101,089.
  • Out of 141 countries, the U.S. has the 4th highest degree of wealth inequality in the world, trailing only Russia, Ukraine, and Lebanon.

But the heart of the film is the people who tell Reich what income inequality means to them and their families, ranging from a wealthy CEO who disdains the “job creator” myth to working men and women struggling from day to day, often one paycheck, one illness, one emergency away from catastrophe.

I was in the audience on Tuesday when MECEP hosted a panel discussion following a screening. When the film ended and the applause died down, the audience took charge. The questions and comments clearly demonstrated that Reich had struck a nerve with virtually every person in the theater.

As John DeFore writes in his Washington Post review:

“Jacob Kornbluth’s ‘Inequality for All’ listens intently as former Labor Secretary Robert Reich recounts the history of America’s rich/poor divide and argues that the status quo is destroying our nation . . . Judging from the pit left in a viewer’s stomach, it does the job pretty well.”

MECEP has already scheduled two additional showings followed with discussion by a panel and the audience. On Tuesday, October 29, we will be at Reel Pizza Cinerama in Bar Harbor for a 5:30 p.m. screening, click here for details and to purchase tickets in advance. On Thursday, November 7, we will be at the Lincoln Theater in Damariscotta for a special 3:00 p.m. program, click here for details.

We are also working with theaters and organizations across the state to schedule more screenings and discussions as we roll out our forthcoming State of Working Maine 2013. This new report addresses many of the issues Professor Reich discusses from a distinctly Maine perspective. Watch our website, Facebook page, and Twitter posts for future showings at a theater near you. Find out for yourself why small can be mighty big!

Congressional Fiscal Shenanigans: O. Henry or Stanley Kubrick?

After weeks of gamesmanship, a minority in Congress succeeded in shutting down the federal government at midnight.  The full impact here in Maine is still uncertain.

We do know that on the cusp of peak leaf-peeping season, Acadia National Park will close and businesses on Mount Desert and throughout the surrounding area will feel the pain. Chris Fogg, executive director of the Bar Harbor Chamber of Commerce told the Portland Press Herald that 70 percent of local businesses have already reported losses of 10-20 percent when the park delayed opening the Loop Road for a month in the spring due to congressionally mandated sequester budget cuts.

“I think we are all hoping they will come to their senses and make a deal because the impact on our communities would be pretty significant,” he said.

The prevailing signs suggest that eventually they will. As President Obama put it last night, “One faction of one party in one house of Congress in one branch of government doesn’t get to shut down the entire government.”

The polls suggest that the government shutdown could be the tea party’s equivalent of “The Ransom of Red Chief,” O. Henry’s story, about two bumbling desperadoes who kidnap the child of a wealthy businessman and demand a hefty sum for his return. The scheme totally backfires when the kid turns out to be a menace, terrorizing his captors. The father replies to their ransom demand with his own ultimatum that they pay him to take his son back. Realizing they’ve made a huge mistake, the scoundrels eventually release the boy and beat a hasty retreat.

Sadly, such grandstanding has become standard operating procedure in Congress. And an even more dangerous threat looms on the horizon: if Congress fails to extend the nation’s debt ceiling before October 17, the federal government will default on its bills.

“Even if it’s a brief failure, it would forever be a signal to the market that you can’t trust the United States government to make its payment when it’s due,” Millan Mulraine, the director of United States research and strategy at TD Securities told The New York Times. “That would shake the foundations of the global financial system.”

Should the political theater carry over to the debt ceiling debate, the stakes will be much higher and the potential outcome more devastating. A better analogy for that eventuality won’t be O. Henry. It would be more like Stanley Kubrick. His classic Cold War black comedy, “Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb,” is about how the deluded actions of political extremist General Jack D. Ripper trigger a “doomsday device” that destroys civilization.

It’s time for the radicals in Congress to end the government shutdown and take their fingers off the switch that could lead to an international economic meltdown.

Beware the Bogus Business Ranking Redux

In December 2011, I wrote the blog post below in response to Forbes magazine’s “Best States for Business” list of that year. Now, for the fourth year in a row, Maine again ranks at the bottom of the magazine’s ranking. While the Maine media is engaged in a feeding frenzy to assign blame, they once again fail to grasp the real issue with the Forbes model: it is a flawed, inaccurate, biased, and misleading assessment of a state’s true business climate.

Beware the Bogus Business Ranking (December 12, 2011)

Forbes magazine is out with its latest “Best States for Business” rankings. Maine’s ranking, 50th, will grab headlines and provide fodder for further assaults on Maine’s environment, workers, and public investments.

BEWARE – these business rankings generate more heat than light when it comes to measuring a state’s real capacity for economic growth.  As a foundation for policymaking they are extremely flawed.

To appreciate the problems associated with one-size fits all rankings, look no further than results from five of the most widely cited business climate indices (including Forbes).   Thirty-four states can claim to be in the top ten for business climate in at least one of the rankings and forty-two states rank among the bottom ten.  This variation is a result of the inherent biases associated with each ranking.

review of the Forbes methodology makes clear their bias against taxes, labor, and states whose economies aren’t centered around large companies or capital flows.

A better business measure for Maine would recognize that people drive economic growth whether they are innovative entrepreneurs or highly skilled workers.  In the long-run states that put people first and maintain a balance of policies that support better quality jobs, better quality workers, and a better quality of life have the greatest prospect for broadly shared prosperity.

The Corporation for Enterprise Development used to produce a report card that was particularly instructive (note the absence of a “gotcha” ranking system).  Closer to home, the Maine Development Foundation in conjunction with the Maine Economic Growth Council produces an annual Measures of Growth report that presents a more balanced set of indicators reflecting our priorities here in Maine.  It was not created to sell magazines or support a particular political agenda.  We would do well to dust off the Measures of Growth report and remind ourselves of what matters here in Maine when future business rankings hit the news stand.

New Report Highlights How the Affordable Care Act Helps Close Affordability Gap

ACA-Exchange-Premiums-Chart-9-2013_small

This week the Kaiser Family Foundation released “An Early Look at Premiums and Insurer Participation in Health Insurance Marketplaces, 2014.” The report provides a summary of health insurance costs before and after federal Affordable Care Act subsidies kick-in for individuals who obtain coverage through the federal health exchange or health insurance marketplace. The premium for one of the middle-tier or “silver” plans for a 25 year-old, earning $28,725 living in Portland, Maine is $232 a month before federal subsidies become available. After the subsidies, the cost is $193 per month. For a 60 year-old earning the same income, the cost is $626 before subsidies take effect and $193 afterward.

This information highlights two very important points in the run up to the launch of the health insurance marketplace on October 1. First, individuals who currently lack affordable health insurance may find much better options through the marketplace. We should be doing everything we can in Maine to promote this opportunity. Second, as Gorman Actuarial predicted in its review of new health insurance laws the Maine legislature passed in 2011, it is the Affordable Care Act and not changes to how insurance companies set their rates that will ultimately reduce the number of uninsured people in Maine. Look no further than the pre-subsidy disparity in costs between older individuals and younger individuals for proof that absent the ACA things would be much worse for everyone but especially for older Mainers.

One final note. While the subsidies will be important in increasing affordability, they are not available to Mainers who will need them most as Governor LePage suggested in error at a press conference last week. Individuals living below the poverty line are not eligible for federal subsidies through the health insurance marketplace. That’s why it is vital that the state accept federal funds to expand Medicaid. Otherwise tens of thousands of Mainers will lack affordable access to a family doctor.

The Governor Misunderstands How Taxes Function

Governor LePage’s assertion that the income tax is a “very regressive tax” is stunningly incorrect.

A regressive tax is one that takes more taxes as a percentage of income from low-income individuals than from higher income individuals. A progressive tax does the opposite. Progressive taxes increase as a person’s income increases.

Property taxes are regressive. Sales taxes are regressive. Excise and gas taxes are regressive. Contrary to what the governor says, the state income tax is progressive.

For example, Maine’s 5% sales tax on basic necessities like appliances or clothing is regressive because, even though high-income people spend more on such items, they use a smaller proportion of their income to do so. Similarly, property taxes hit low-income Mainers harder because unlike wealthy individuals who have less of their assets made up of real property, low-income homeowners have a larger percentage of their income tied up in their home and pay proportionally more in property taxes.

Maine’s tax system is regressive not because of the income tax but because it relies too heavily on property and sales taxes. In 2009 (the latest data available), low- and middle-income families in Maine paid a greater percentage of their income in state and local taxes than their wealthy neighbors. Because higher income individuals pay more in income taxes than low-income workers, they get a bigger break when income taxes are lowered. Low-income individuals, who spend more of their income on property and sales tax, benefit significantly less when incomes taxes are cut. Any tax structure like Maine’s where the rich pay proportionately less than the poor is regressive.

And proposal after proposal put forth by Governor LePage only makes Maine’s tax code more regressive.

Last year, the governor and legislature greatly reduced taxes for those with high incomes. They cut Maine’s most progressive taxes –income, pension, and estate taxes –where the most benefit goes to Maine’s richest 10%.

And this year, the governor wants to eliminate funds to municipalities specifically designed to offset property taxes. In addition he proposes to take a portion of the municipal excise tax that helps to maintain local roads, cut the amount the state reimburses municipalities for general assistance, and contribute less to the cost of local education. The governor’s choices would impose millions of dollars in new regressive property taxes on Maine homeowners.

On top of that, he would gut the “circuit breaker” and homestead property tax relief programs for those whose rent or property taxes comprise a high percentage of their income. Hard working homeowners and renters facing skyrocketing property taxes would have no relief.

To be clear –the governor’s position on taxes is biased against low-income Mainers. The state income tax makes our overall state and local tax system more progressive. Cutting state income taxes makes our tax system more regressive. If the governor is concerned about regressive taxes he should stop cutting the income tax and start cutting property and sales taxes.

A fundamental goal of any tax system is progressivity. Progressive taxes are fairer because they reduce inequality. Those with higher incomes pay more, while hardworking, low-income Mainers get a little more in their take-home pay. Governor LePage must understand this basic tenet of tax policy so he can act for all Mainers, regardless of income. His recent statement shows that he doesn’t. That’s a problem.

Two Steps toward Tax Fairness

At MECEP we’ve written often about the lack of fairness in Maine’s tax system. The bottom 20 percent of Mainers pay 17 cents on every dollar earned in state and local taxes while the top 1 percent pay less than 10 cents on every dollar. The average Mainer pays a little more than 11 cents on every dollar.

Ensuring that Maine’s wealthiest residents, those earning more than $250,000, pay what the average Mainer pays would go a long way toward closing our current budget gap and improving the fairness of Maine’s tax system.

Asking the wealthiest Mainers to pay a penny more per dollar earned would generate significant revenue. Why should a bus driver pay 7 cents more per dollar in taxes than a high paid executive? If each paid an amount of taxes that was proportional to income, then both would have the same state and local tax rate.

That’s step one: making sure that everyone pays their fair share or, in the case of Maine’s wealthiest taxpayers, an amount that is equal to what the average Mainer pays relative to income. Warren Buffett has called a lot of attention to this concept nationally by pointing out that his effective tax rate is significantly lower than his secretary’s.

The second step would be to use these funds to reduce state and local taxes for those who are already paying more than their fair share. This can be done by restoring Maine’s circuit breaker program that provides property tax relief to low- and middle-income Mainers or by making Maine’s earned income tax credit more robust and refundable.

This is not a theoretical exercise. Maine’s own Buffett Rule, proposed by House Majority Leader Seth Berry, could go a long way toward advancing tax fairness. By taking on this issue head-on, Representative Berry has put a stake in the ground for tax fairness. While we’re still assessing the specifics of Rep. Berry’s proposal, the approach looks promising.

Make no mistake: taxes – specifically property taxes – are going up if even one of Governor LePage’s budget proposals is enacted. If this happens, Maine’s tax system will be even less fair than it is now. Resolving our current budget challenges requires lawmakers to assess the full range of taxes – sales, property, and income – that people pay and strike a better balance among these that improves tax fairness and secures the resources needed to invest in Maine’s schools and communities.

Update: An earlier version of this post cited an estimate that raising the per dollar share that people earning more than $250,000 per year pay in state taxes would generate as much as $100 million in additional revenue. Since writing the initial post, MECEP has obtained new information from Maine Revenue Services that we are evaluating to arrive at a more accurate estimate.

Stop Tax Increases on Maine Working Families and the Middle Class

During the 125th Maine Legislature, Governor LePage insisted on more than $430 million in tax cuts that mostly benefit wealthy Mainers. He got his way. Wealthy Mainers got enormous tax cuts. Now the bill is due.

The Governor plans to balance the budget entirely on the backs of local communities, K-12 schools, and low- and middle-income Maine residents. He is asking for virtually nothing from wealthy Mainers.

This week is our chance to tell Governor LePage and Maine legislators that it is unacceptable to balance the budget by raising taxes on the poor and the middle class and slashing funding for our local schools and communities. Wealthy Mainers must pay their fair share.

On Wednesday March 13, the Legislature’s tax and budget-writing committees will accept public comments on the tax provisions in the Governor’s proposed state budget for the two-year period beginning July 1st, 2013. Approximately $430-440 million of the $881 million budget gap is due to income, pension, and estate tax cuts enacted over the past two years. Remember, the vast majority of the benefits of those tax cuts went to high-income families.

  • 2011 Income Tax Cuts: According to Maine Revenue Services data, over 40% of the benefits of the income tax cuts went to the richest 10% of Maine households- those with expanded incomes over $121,000. Over 60% of the benefits of the income tax cuts went to the richest 20% of Mainers.
  • 2011 Estate Tax Cuts: These tax cuts only apply to Mainers with estates worth more than $1 million, and the vast majority of the benefits accrue to the heirs of multi-million dollar estates.
  • 2012 Pension Tax Cuts: These tax cuts disproportionately benefit wealthy retirees with little or no benefit to low- and middle-income retirees. 58% of the benefits went to the richest 20% of households and 75% of the benefits went to the richest 30%. Seniors living only on Social Security retirement income got nothing.

Remember, Maine’s state and local tax system favored the wealthy even before these tax cuts were enacted. In 2009, the wealthiest Mainers paid 10 cents out of every dollar they earn in state and local taxes. Everyone else paid more. This situation was made worse by all of these tax cuts for the wealthy.

Now the bill for all those tax cuts is due. Here’s how Governor LePage plans to fill in a $430+ million dollar budget hole without making wealthy Mainers pay their fair share in taxes:

  1. Cut funding for K-12 schools and shirk the state’s voter-mandated responsibility to pay 55% of the bare-minimum cost of educating Maine kids. Right off the bat, the Governor was able to knock the $881 million budget gap down to about $630 million by choosing to “flat-fund” K-12 schools. In inflation-adjusted terms, that means school funding will be cut. But in addition to “flat-funding” schools, the Governor will “save” another $28 million over the biennium by forcing property tax payers to pay for half the cost of a teacher retirement program that municipalities and property tax payers had no hand or say in creating.
  2. Force higher property taxes with cuts to basic public services by slashing routine aid to all of Maine’s 490+ towns and cities. The Governor’s plan eliminates all state revenue sharing with towns and cities. This saves the state $283 million over the biennium and forces property tax payers to cover the loss, through some combination of property tax increases and lost municipal services. Since property taxes hit low- and middle-income homeowners and renters especially hard, this is a favor for Maine’s highest income households and a burden for everyone else. Even if towns take a balanced approach to covering this lost revenue from the state, local property tax payers will see their property tax bill increase by at least $80 per year, on average. Many middle class families will see much larger increases.
  3. Raise taxes on low-and middle-income Maine residents by eliminating over $80 million in property tax relief. Even in the unlikely event that towns manage to cover large losses in state aid without raising property taxes, middle class Mainers face a tax hike of at least $80 million over the next two years under the Governor’s plans to eliminate property tax relief through the Maine Residents Property Tax and Rent Refund Program (aka “Circuit Breaker”) and the Homestead Exemption. Out-of-state folks who own second homes in Maine will spared, but low-income and middle class homeowners and renters will not. The average property tax hike for homeowners who claim the homestead exemption will be about$120 per year. Up to 75,000 low- and middle-income Mainers—including seniors—who currently claim a partial property tax or rent refund under the circuit breaker program will see an average tax hike of about $479 per year.
  4. Use a stealth accounting trick to increase income taxes for the middle class. Governor LePage’s budget proposal also saves almost $9 million over the biennium by suspending the automatic inflation adjustments for Maine’s income tax brackets. This will increase taxes by about $49 for Maine residents who earn over $20,000 per year. Middle class families will pay for most of this tax increase.

Remember, the median Maine taxpayer got about $150 per year from the “largest tax cut in Maine history”. The poorest 1 out of every 2 Maine families got an average income tax cut of about $50 per year. Compare that to the slate of tax increases in the Governor’s proposed budget outlined above.

This plan to balance the budget on the backs of schools, communities, and low- and middle-income Maine taxpayers is unacceptable. Now is the time to tell our lawmakers.