AUGUSTA — Gov. Paul LePage will address the Legislature and the people of Maine on Tuesday when he stands before a joint convention of the House of Representatives and Senate to deliver his assessment of the state of the state.
A year ago, LePage broke with modern tradition and decided to deliver his remarks in writing. But this year, with a $6.8 billion state budget proposal and a host of other issues and initiatives before the Legislature, the governor is returning to give an in-person State of the State address in the House chamber, even though his staff is quick to remind reporters that the message will be meant more for Maine’s 1.3 million residents than it is for the 186 lawmakers in Augusta.
While LePage hasn’t gone into detail about the contents or even the subject areas he hopes to touch on – his communications staff said Friday that the speech was still being drafted – he has said the struggles of Maine’s oldest and most vulnerable residents will be a big part of the speech.
“It’s going to be heavily weighted to what’s happening to the elderly in our state,” LePage said Thursday during an appearance on a radio talk show hosted by Matt Gagnon and Ken Altshuler on South Portland-based WGAN. “The foreclosures by utilities, the foreclosures by communities on taxes. I’m going to be bringing in some elderly and I’m going to let the people of Maine see that people have been thrown out in the streets.”
LePage is also expected to talk about a minimum wage hike that was also approved by voters last November. Before the ballot question’s passage, LePage warned that it would have the biggest impact on those on fixed incomes, especially the elderly living on Social Security alone, as the mandated higher wage will push businesses to increase the prices on their goods and services to retain profit margins.
“People talk about this minimum wage like it’s not going to hurt anybody, but I’ll show you some people that are being hurt by it next Tuesday,” LePage said.
LePage, along with a number of lawmakers, both Republican and Democratic, is pushing to change the law, which bumped Maine’s minimum wage to $9 an hour this year and moves it to $12 an hour by 2020.
LePage is among those who want to roll back the law’s requirement that employees who earn tips, especially waiters and waitresses, are also paid the minimum wage. Previous law allowed those employers to pay 50 percent of the minimum wage to tipped workers, provided that their tips were at least equal to the hourly minimum.
In his previous addresses LePage has consistently focused on the state’s tax system, which he believes is out of date and relies too heavily on the income tax and not enough on the sales tax. But previous efforts by LePage to both increase the sales tax and broaden it to be applied to more goods and services – in an attempt to export more of the cost of state government to visitors from out of state – have met with mixed results.
Since taking office, LePage has managed to increase the general sales tax by 0.5 percent while also increasing the tax on restaurant meals and hotel lodging. But his efforts to expand the tax to a broader range of services – including entertainment and recreational activities such as golfing and skiing – have been rejected. LePage and his allies were able to add the sales tax to the sale of newspapers and other periodicals that charge for a subscription, but attempts to add the tax to haircuts, beauty salons and other services, such as car repairs, landscaping and snow removal, have also been rebuffed by the Legislature.
‘PROSPERITY’ IS HIS METRIC
How LePage sums up the state of the state in 2017 will likely include references to how Maine stacks up compared with other states in the areas of taxation, wages, education and overall “prosperity.” LePage frequently says he wants to lead the state from poverty to prosperity by cutting taxes, reforming welfare programs, lowering energy costs and creating new, good-paying jobs.
“States with the most prosperity have the lowest income tax rates or no income tax,” LePage wrote in his 2016 address, which he also used to berate lawmakers who he said had moved from simply being liberal to being “socialists.”
In 2015, during a 47-minute speech, he touted his plan to reduce income taxes as a new “pathway to prosperity.”
“Maine is currently not competitive nationally or globally. Our tax system is antiquated. We must modernize it,” LePage said in 2015. “My fellow Mainers, you work hard for your paycheck. The government takes your earnings, and you have no control over how it is spent.”
During a town hall meeting last week in York, LePage again reiterated his desire to increase prosperity in Maine but lamented that the state was ranked 44 out of 50 states in that category, although he did not cite a source for that information.
LePage may or may not talk Tuesday about the state’s ongoing opioid drug crisis and what more can be done to combat it. In recent town halls he’s broached the subject, noting that the crisis was claiming as many as seven Mainers a week from overdoses. But lawmakers have said LePage’s current budget appears devoid of new policy reforms or new funding for drug enforcement, education or addiction treatment.
In 2015 lawmakers and LePage did increase funding for all three categories, including the addition of new drug enforcement agents and approval of a plan and funding that will bring a new 10-bed treatment facility for drug addicts to eastern Maine. Still, lawmakers say more needs to be done to turn the corner on a death toll that has steadily increased despite the renewed focus on interdiction and treatment.
Sen. Nate Libby, D-Lewiston, the Senate’s assistant minority leader, said in some ways Democrats are frustrated that the new 10-bed facility hasn’t been built yet, given LePage’s rhetoric on the drug crisis.
SOME DEMOCRATS UNMOVED
Libby said he expects LePage to offer some repeated themes. He said a focus on the plight of the elderly facing dire economic straits would be welcomed, although there seems to be a disconnect between some of LePage’s policy proposals, including eliminating a state reimbursement to cities and towns for General Assistance welfare expenses or cutting other programs that aid cities in order to reduce the income tax. Libby said many of LePage’s proposals simply push state costs onto local property tax-payers, a situation that exacerbates the economic pressures of elderly homeowners and others on fixed incomes.
“The governor doesn’t seem to understand the connection between his policies that shift costs down to the towns and cities and the difficulty … elderly and low- to moderate-income folks have in trying to pay their property tax bills,” Libby said. He said LePage’s address will likely be a “broken record kind of speech.”
“He will talk about energy, he will talk about income tax, but I don’t think he is going to talk about making serious investments in tackling the drug crisis,” Libby said. “I don’t think he’s going to talk about making serious investments in addressing our workforce shortage, and I wouldn’t be surprised if he takes the opportunity to support the president’s policies on immigration.”
Democrats have been critical of LePage’s repeated efforts to keep Maine’s largest cities, mainly Portland and Lewiston, from providing General Assistance welfare benefits to immigrants seeking asylum in Maine.
Libby said LePage’s stance is “the exact wrong type of policies that Maine needs to attract young, able-bodied working people to the state.”
Assistant House Majority Leader Jared Golden, D-Lewiston, said while he is pleased LePage is again offering his State of the State address in person, he suspects that beyond the rhetoric will be sharp policy divides. Golden, like many Democrats, doesn’t question LePage’s basic intentions.
“I do not question that the governor wants to do right by people,” he said. “But we just do not agree with the way he wants to do that.”
CREDIT WHERE IT’S DUE
Republicans leaders are more optimistic about what they will hear from their governor on Tuesday.
House Minority Leader Ken Fredette, R-Newport, said he hopes LePage will take the opportunity to mark what Republicans consider important progress on cutting taxes, reforming welfare programs and righting the state’s financial affairs. Fredette said LePage often forgets to celebrate achievement because his focus is on continuing to limit the reach of state government, especially its reach into taxpayers’ pockets.
Fredette said the state’s structural budget gap in 2010 was about $1.2 billion, and LePage over six years has chipped that down to about $150 million.
“That’s a big deal,” Fredette said.
He said LePage’s previous tax cuts eliminated the state’s income tax entirely for 150,000 low-income wage earners, and the creation of a refundable state earned-income tax credit will help thousands more. He said unemployment has been cut in half under LePage, and while some of that has to do with external factors in the broader U.S. economy, Fredette said he hopes LePage will mention some of the improvement Maine is making.
“I’d like to hear him talk about some of the accomplishments that we have had together,” Fredette said. “There’s been a lot of talk in the media about what we haven’t been able to get done, the Legislature and the governor together, but when you look at those accomplishments compared to many other states, there’s a lot there.”
Fredette said the state’s budget is in the black and its state employee pension liability is trending downward, while more than 24 other states are facing budget shortfalls and pension liabilities that threaten to bankrupt state government. Maine is not in that situation, thanks largely to LePage, Fredette said.
“Those are significant global achievements,” Fredette said. “In light of all the problems people say there are between the Legislature and the governor, we’ve gotten big things done.”
Senate President Mike Thibodeau, R-Winterport, said he expects that LePage on Tuesday will quickly highlight accomplishments and then move to the challenges Maine is still facing and problems that the governor will need to work with the Legislature to solve. For many Republicans, that includes doing something to mitigate the 3 percent tax hike on higher-income households that voters approved in November. Thibodeau said he believes many who voted for that hike to help schools don’t realize how it will affect Maine’s small businesses, which employ the bulk of the state’s workers.
He said companies are starting to “bubble up” with concerns about being able to recruit high-salaried professionals who can work in other states with less of a tax burden. Thibodeau said LePage will also have to work with the Legislature to bring functioning regulations to recreational marijuana sales in Maine. While the Legislature has postponed retail marijuana sales for at least a year, Thibodeau said crafting that regulatory regime will consume a lot of time and a lot of focus for lawmakers in 2017. He said he hopes LePage will make note of that challenge as well.
Thibodeau said not least among the challenges facing LePage and the state will be to get 186 lawmakers in Augusta to reach consensus on the most critical issues.
“Each and every one of those 186 members is anxious for solutions, and it doesn’t matter whether they are coming from the chief executive (the governor) or their colleagues, everybody wants solutions to the challenges of our state,” Thibodeau said.
He said LePage will have a big role to play in both offering solutions and embracing solutions offered by others. “We are going to work through the challenges and obstacles because we all want what’s best for the state.”
Scott Thistle can be contacted at 791-6330 or at:
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