Being firmly ensconced in the minority in Augusta, and with Democrats throwing dozens of bad ideas on to the floor to see what sticks, it’s understandable that Republicans might be more than a little distracted.
They can’t do much to stop regular legislation if the majority is firmly on board – they only can stop the budget and emergency legislation from passage on the floor. Their greatest opportunity to really affect the outcome on everyday legislation is by rallying the public to their side and convincing the majority to reject whatever proposal is being considered, whether that’s in committee or on the floor. They were recently successful in doing this with a major show of opposition to a proposed carbon tax.
Hopefully, they can repeat that performance and manage to sink a misguided plan to implement a local-option sales tax in Maine. This legislation would allow municipalities to pass their own sales tax to get more money for town coffers. Republicans in Augusta should oppose this tax increase and do everything in their power to reject it at every step of the process, from committee hearing rooms to the floor and beyond, if necessary.
Having a reasonable discussion about a local-option sales tax might have been worthwhile when we had a governor who wanted to cut state taxes and was trying to eliminate revenue sharing. If there had been bipartisan support to explore a local-option sales tax as an alternative source of revenue, that could have been an interesting discussion. Now, though, we have a governor and a Legislature who are working to increase revenue sharing and show no interest in cutting the state sales tax, so there’s no good reason to allow cities to impose their own sales taxes.
Supporters of the concept may argue that, though new leadership in Augusta seems committed to reversing the cuts to revenue sharing, they aren’t doing it fast enough to make up for previous lost revenue. That argument is incredibly misleading, though: Municipal leaders ought to be well aware that Gov. Mills can’t undo eight years of cuts to revenue sharing in one fell swoop – or at least, she can’t while expanding Medicaid and keeping her promise not to raise taxes.
Rather than pushing for a new tax to be implemented right now, towns and cities across Maine ought to continue doing what they can to cut costs and constrain spending. That would be the responsible approach, because while it may be a nice theory that a local sales tax would be used to keep property taxes down, there’s absolutely no reason to believe that would actually happen. Moreover, there’s no reason to believe that municipal leaders wouldn’t continue to push for increased revenue sharing even if Maine had a local-option sales tax.
If local officials were really focused on reducing property taxes, there are other options to discuss if they don’t think they can cut any more spending. One possibility would be to examine unfunded state mandates on local governments and see what could be done to eliminate or fund them at the state level. It’s curious that, while local officials frequently complain about these mandates, state legislators haven’t undertaken any such major effort lately. It may be because these unfunded mandates offer a convenient fiction to both sides: State legislators can feel like they’re doing something while local officials get an excuse for why they can’t cut spending.
It’s not just that the specific legislation introduced this session is poorly crafted, either, though it most certainly is. The bill doesn’t require municipalities to set aside the revenue for a particular purpose, like education or reducing property taxes. Instead, when the local sales tax is first passed, it’s defined by residents what it can be spent on – but that provision is fairly broad. It also doesn’t keep the town from continuing to receive state revenue sharing; indeed, the state cannot consider local sales taxes as part of the revenue sharing formula under this proposal.
No, the very concept of a local-option sales tax is fundamentally flawed. Rather than bemoaning Maine not having it, we should be thanking our lucky stars, as it’s a competitive advantage. Local sales taxes create a patchwork of tax rates across the state that are not only bad for businesses but would deepen the economic inequality between different parts of Maine. That’s not the right direction for Maine, and it’s an approach that legislators from both parties ought to simply reject out of hand.
Jim Fossel, a conservative activist from Gardiner, worked for Sen. Susan Collins. He can be contacted at:
Twitter: jimfossel
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