Maine Governor Will Now Focus Only on Tax Reform
Paul LePage vows to spend the "rest of my days" fighting opponents of his plan to cut income taxes and hike sales taxes.
By Mario Moretto
Gov. Paul LePage on Wednesday took his budget-promotion roadshow to the Queen City, where he pledged to fight in 2016 to defeat any lawmaker who opposes his efforts to decrease the income tax.
LePage spoke at a luncheon held by the Maine Heritage Policy Center, a conservative think tank, at the Cross Insurance Center. About 70 people attended, each paying between $45 and $55 to hear the governor's speech.
In the evening, he took the stage at Husson University's Gracie Theater for a public Q&A, where he was joined by Auburn Mayor Jonathan LaBonte, director of LePage's Office of Policy and Management. It was the second such town hall-style meeting for LePage and LaBonte, who have five more scheduled through the end of April.
The governor's sales pitch was roughly the same as it has been for weeks: LePage said his tax reform plan will improve Maine's ability to woo young professionals, retirees and job creators by decreasing the income tax and eliminating the estate tax and the tax on military pensions.
LePage has said his budget, which would reduce the top income tax rate from 7.95 percent to 5.75 percent, is just a step toward eliminating Maine's income tax. He has promised to propose a constitutional amendment to repeal the income tax.
On Wednesday, he said he had little faith the amendment would pass this year, but he seemed confident that even if he couldn't win in the State House, he can win in the court of public opinion.
"I fully expect the Legislature will say no this year," LePage said. "But next year is an election year. And I will spend the rest of my time as governor fighting the battle to eliminate the income tax and lowering energy costs, I promise you."
LePage pledged to target any lawmaker who votes against his efforts. "I will spend the rest of my days going after those people," he said. While LePage is gearing up for a fight over that constitutional amendment, which has not yet been submitted to the Legislature, he faces more immediate opposition to his budget plan, a version of which must be passed before the end of June.
Other than calling it "bold," Republican lawmakers have been largely mum on the tax reform plan. Democrats, who reserved judgment on the budget when it first was announced, have been increasingly critical.
While the $6.57 billion two-year budget proposal contains big shake-ups in the state's Department of Agriculture, Conservation and Forestry, controversial changes to state welfare programs and the elimination of state aid to municipalities, its centerpiece is a monumental shift in the state's tax code.
To replace lost income tax revenue, LePage would increase the state's sales tax and broaden the base of goods and services on which it's levied, a proposal that has irked several retail and service interests groups. He also would force large nonprofit organizations to pay property tax.
That tradeoff is meant to export a greater share of Maine's tax burden to tourists and seasonal residents. LePage also has argued it's more fair to tax consumption than income.
LePage said Wednesday that the moves all are designed to make Maine more competitive. The state's high energy costs and high taxes, he said, have hurt the state's economy and resulted in a demographic catastrophe.
"Your kids leave the state. Your retirees leave the state. Job creators go elsewhere, because they can get a better bang for their buck," he told the lunch crowd. "This budget is attempting to stem the loss of population. It's an attempt to fuel economic growth."
LaBonte put it even more plainly: "The goal at the end of the day is for Mainers to see more in their bank accounts, and the government taking less."
LePage's administration estimates the plan would result in a roughly $300 million annual tax cut for Mainers by 2019.
The governor has pointed to assessments by groups such as the conservative-leaning Tax Foundation, which recently ranked Maine 33rd in the nation for business climate. If LePage's budget goes through unaltered -- an unlikely scenario, given that Democrats control the House of Representatives -- the Tax Foundation estimates Maine's rank would rise to 23rd.
The budget, however, has not been without its opponents. Businesses that would see their goods or services taxed for the first time have lined up to oppose the expansion of the sales tax. Immigrants-rights groups and advocates for the poor have blasted reductions to general assistance.
Health experts and students decried a plan to take money from community-based smoking prevention efforts. Maine's towns and cities once again are asking that state aid to local government not be cut.
LePage said he knows the budget has caused some heartburn, but said even its enemies would benefit from a reduced tax burden.
"Everybody's angry," he told the crowd at the Gracie. "I must be doing something right. But the point being, Mainers as a whole, the people I represent, are going to be the big winners."
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