AUGUSTA — The 128th Maine Legislature took up nearly 1,600 bills over the past six months. Many had weighty policy implications for our state and economy. But without question, it was the outcome produced by last fall’s referendum questions on minimum wage, education funding, marijuana legalization and ranked-choice voting that overtook much of the time, energy and patience of Maine lawmakers this session.
Almost from the start of the session it became clear that Question 2, which would have imposed a 3 percent surtax on individuals, families and businesses that earn more than $200,000 a year to increase funding for K-12 education, would be a center point of contention, both between legislators of the different parties and the affected stakeholders. That tension was amped up when it became clear that any solutions to the 3 percent problem would be addressed in the biennial budget and not separate legislation. In plotting this roadmap, it virtually guaranteed a nail-biting finish to the session. And we weren’t wrong.
The Maine State Chamber of Commerce, which led the opposition to Question 2 last fall, formed an expansive coalition of more than 30 statewide business associations as well as individual businesses with the goal of eliminating the 3 percent tax increase, all the while supporting additional funding for K-12 education. Business of all sizes throughout the state saw Maine’s looming 10.1 percent top tax rate – which would have been one of the highest in the nation, behind only California – as an economic tsunami, that was certain to have slowed Maine’s future growth and blunted investments in our state.
Added to this was the well-stated position of the Maine Senate president and others on the Republican side that legislators would not be concluding their business until the 3 percent tax was gone, and an acceptable alternative substituted. On the other side stood Democratic legislators and teachers union leaders urging that the tax remain, or an equally sustainable funding solution be developed. Lastly, Gov. LePage submitted a biennial budget draft that kept the 3 percent tax in place, but lowered the overall tax rate for all filers and put only a small amount of new monies into K-12 education.
While the Appropriations Committee agreed on much of the budget, they could not agree on the education funding portion, with the two sides at times hundreds of million of dollars apart. Eventually, Maine House Speaker Sara Gideon and Maine Senate President Mike Thibodeau stepped in, creating a Committee of Conference between the two sides in an attempt to find commonality. The result was a budget that, while receiving overwhelming bipartisan support in the Senate and earning unanimous Democratic support in the House, still failed to get the necessary two-thirds votes in the House because of Republican opposition. This resulted in the state government shutting down without a budget June 30 for the first time in more than 25 years.
But the shutdown wouldn’t last for long. By early in the morning of July 4, an agreement had been reached between Democrats and Republicans in both the Maine House and Senate, as well as Gov. LePage, on a $7.1 billion biennial budget that repealed the 3 percent surtax and put another $162 million into K-12 education, dedicating half the new education spending to property tax relief for Maine’s towns and cities. Thus ended the shutdown of 2017.
Maine’s business community fully backs increased funding for K-12 public education in our state. Educating Maine’s future workforce is a priority to us. Yet the negative impact the 3 percent tax would have had on our economy if it had stayed in place cannot be understated.
If it had not been for the difficult work of the Legislature, whose challenge at times seemed impossible, we would not be at the point where we find ourselves in today – full repeal of the 3 percent tax and the largest investment in Maine’s K-12 education system Maine has ever made. We are grateful to all legislators whose hard work and commitment to Maine’s future resulted in what is a big win for our state on all sides.
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