YARMOUTH — Former Gov. John Baldacci and Maine’s current governor, Paul LePage, have both spoken out against statewide Question 2 (An Act to Establish The Fund to Advance Public Kindergarten to Grade 12 Education). And when do they ever agree?
They agree because raising our top individual income tax rate by 42 percent to the second highest in the nation would be the equivalent of throwing in the towel for our state’s efforts to invigorate our economy. It would ultimately depress growth and raise less overall tax revenue, not more. Economic growth, new business and the retention of highly skilled employees will all suffer.
It is understandable that the Maine Education Association would seek more dues-paying members, but it would be detrimental to the future of our young people and state if there were fewer job opportunities and less overall tax revenue.
Question 2 proposes to add a 3 percent income tax surcharge to those who earn at least $200,000 after deductions. In the short term, this may raise more revenue, but in the medium to long term, it is not the path to attracting and retaining the highly skilled leaders and businesses that create a vibrant economy with the resulting healthy tax revenues.
A 5 percent tax on a lot returns far more revenue than a 10 percent levy on a little. Massachusetts knows this, as do many other states.
Massachusetts has a vibrant economy, the highest-rated public schools in the nation, according to Education Week’s 2016 Quality Counts report card, and a maximum individual income tax rate of 5.1 percent. Maine’s Question 2 would raise our state’s top individual income tax rate to 10.15 percent.
Basic economics tells one this would undermine our efforts to also become a similarly leading economy, which would add ever-expanding revenue to benefit Maine’s public schools, ranked 14th in the nation by Education Week. Ultimately, if Question 2 passes, education in Maine would receive less and we would all be the poorer for it.
Even if the 3 percent surcharge were to temporarily raise revenues to be dedicated to hiring teachers, we all know what the various Legislatures have all done since a 2003 referendum required that the state cover 55 percent of K-12 public education costs. It has never been done. As they did with the casino and lottery referendums, the Legislature has found ways around implementing the 55 percent requirement.
Maine does not have a Silicon Valley or a New York City. We have been trying to build a more vibrant economy for decades. Other states, such as South Carolina, Nevada, Alabama and Texas, have succeeded at this goal in recent years, attracting large facilities from Toyota, Apple, Tesla, Samsung, BMW, Volvo, Mercedes-Benz and more.
One thing those states all have in common is lower taxes than Maine, varying from 0 percent to 7 percent. The skilled employees for these companies will provide significant increased income tax revenue in the future.
If one were trying to sabotage our attempts to invigorate our economy, you couldn’t do a much better job than Question 2. Why would a growing technology company, an auto plant, a medical professional or a high-tech executive move here when just over the border in New Hampshire, they would get a 10 percent raise? Worse still, we would risk losing highly skilled residents presently residing in Maine.
As it is now, Portsmouth-area commercial real estate brokers will tell you companies looking to expand will not do so in Maine because of the income taxes. Why would we then place an even greater impediment in the way of growing our economy by increasing our highest personal tax rate by 42 percent?
We all want the best possible education for our state’s children, but risking our economy’s future is absolutely not the way to do it.
In the end, Question 2 is a serious threat to Maine’s present economy, its growth and our kids’ futures. It will result in less revenue for education and everything else as well.
A “no” vote on Question 2 is a vote for both Maine’s economy and its young people.
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