Every two years the Maine Legislature passes a new, balanced, state budget. The budget is a document that reflects our values and our priorities.
I, along with my colleagues on the state’s budget writing committee, have spent the past month holding public hearings in review of Gov. Paul LePage’s proposed $6.5 billion budget. We’ve heard from hundreds of people.
The message we heard from the public was clear: the governor’s tax reform budget largely benefits the wealthy and big corporations, while shifting the tax burden to local property taxes.
To be clear, there are ideas put forth by Gov. LePage that I agree with. For the 10 years I have served in the legislature, Democrats have tried to pass meaningful, fair, tax reform. I am pleased that tax reform and lower income taxes are back on the table, but, I have grave concerns that in the governor’s proposal, the most significant tax breaks go to those individuals making more than $175,000 ”“ and to big corporations.
I am concerned that this loss of $300 million in revenue to the state’s coffers will result in significant cuts to investments like education and job training ”“ the very programs that help Maine families, workers and small businesses.
This proposal offers nothing to encourage young people to stay in Maine ”“ or return to Maine. As the state with the oldest population ”“ as the state that has more people retiring than entering the workforce ”“ we need to retain our young people and recruit new people to our state. And the governor’s budget proposal fails to do this.
Additionally, we heard from more than 50 town officials from across our state that eliminating revenue sharing would have a dire impact on their communities. Towns rely on these dollars to fund services in order to keep property taxes stable.
Between the governor’s cuts to revenue sharing and his proposal to eliminate the Homestead Exemption for folks under the age of 65, he’s missing the mark. We should be looking for ways to reduce property taxes, not shift additional taxes onto homeowners.
In an attempt to give Maine towns a way to recoup taxes lost from revenue sharing, Gov. LePage has proposed allowing municipalities to tax nonprofits. Municipal officials and nonprofit leaders expressed very serious concerns about this proposal.
Many nonprofits provide important services for our community but they have very little cash assets, like our summer camps, libraries, and museums. Nonprofit leaders told us that it would place a huge, if not impossible, burden on them to pay new property taxes.
There is also reasonable concern that larger nonprofits like our hospital, Southern Maine Health Care, and the University of New England will pass on the cost of paying new taxes on to consumers ”“ namely, patients and students.
We also have to look at what is going to happen in communities that don’t have any nonprofits or not enough taxable nonprofits to make up the difference lost by revenue sharing.
Should this go forward, Maine would become the first state in the nation to tax nonprofit organizations.
Under the governor’s budget, he has proposed increasing the sales tax. According to a law passed in the previous Legislature, the sales tax of 5.5 percent was supposed to go back down to 5 percent in June 2015. That would mean a 30 percent increase from 5 percent to 6.5 percent by 2016 and expanding the sales tax to include more things such as movies, personal services, (i.e. haircuts and landscaping) and professional services, (i.e. accounting, legal, and photography). At this point, I share the concern that many individuals and businesses have expressed about the raising of the sales tax. As a senator representing businesses in York County, I know how easy it is for people to simply travel to New Hampshire to purchase goods to avoid the Maine sales tax. I would like to see us keep the promise made by the previous legislature and look at other ways to make up the difference.
In the coming weeks, we will be reworking and negotiating aspects of this budget. I can tell you that I, along with my Democratic colleagues, will seek a better budget deal for all Mainers. We will work to make it fair for small businesses.
And, we will not lose sight of our future ”“ our investments in education and our workforce ”“ in giving young Mainers a reason to stay here and others a reason to make Maine their home.
Meanwhile, I am hosting three public forums:
Ӣ Saco: Saturday, March 21 from 10 a.m. to noon in the Saco City Hall Auditorium;
Ӣ Old Orchard Beach: Saturday, March 28 from 10 a.m. to noon in the Old Orchard Beach Town Hall Council Chambers.
Ӣ Hollis: Wednesday, April 1 from 7-8 p.m. in the Hollis Community building.
I hope to see you there.
— Sen. Linda Valentino of Saco, represents Senate District 31.
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