When it comes to discussions over the next biennial budget, Republicans in the Legislature ought to try something novel this time: having an actual strategy.
Last time, they negotiated in good faith in an attempt to pass a bipartisan budget. Republicans no doubt hoped that, having successfully negotiated a supplemental budget, they would also be able to do so again. Their good-faith efforts, however, were rebuffed by their Democratic colleagues, who decided to ram through a majority budget. Gov. Mills, despite her campaign promise of bipartisanship, went along with it in the end, refusing to stand up to her own party when it mattered the most. If that strategy – of feigning bipartisanship for political convenience – sounds familiar, it’s because it’s the same approach President Biden has used throughout his first term.
With her latest budget proposal, Gov. Mills again attempts to thread the needle between fiscal responsibility and liberalism by increasing spending without raising taxes. While that’s better than just raising taxes, it’s still not good enough. Republicans should make that clear from the very outset of negotiations. In order to do that, though, they need to have a serious alternative, just as progressives do, and they all need to be unified on it.
What should that substantive alternative be?
Clearly, rather than going along with or merely pushing back on Mills’ runaway spending, they ought to try and halt it entirely. Republicans should design a specific proposal for returning the entire surplus to the taxpayers in the form of tax cuts. They’ll never get that, of course: If Mills wanted to offer any real tax relief to Mainers, she would have proposed it herself. It’s pretty clear that, rather than actually returning taxpayer money, the governor would rather just spend it and then get credit for not taking more of it. Republicans can’t get away with just making vague demands that will never be fulfilled, though: they’ll need to offer their own specific proposal.
In years past, guided by then-Gov. Paul LePage, Republicans zeroed in on eliminating or reducing the state income tax. While that’s not a bad idea, the last time LePage pursued it he proposed paying for an income tax reduction by expanding the sales tax. Fortunately, that plan went nowhere at the time. It was fundamentally flawed: Tax cuts should never be paid for with tax increases.
It was a bad idea when then-Gov. John Baldacci did it in an attempt to reformulate the sales tax, and it was a bad idea when LePage floated it to cut the income tax. Any such schemes are complex and unnecessary, especially when the state has a budget surplus. Raising some taxes to pay for reducing others is just a shell game, an illusion of a policy shift designed to get votes rather than a real structural reform that benefits the state long-term. Indeed, in that sense such proposals are rather similar to the checks sent out for “inflation relief” or “heating aid”: short-term attempts to curry political favor, not real solutions.
Instead, tax cuts should be paid for with either cuts in spending or the state budget surplus. Moreover, Republicans shouldn’t keep focusing on reducing the income tax; that’s both bad policy and bad politics. They should shift their focus towards the reduction or elimination of the sales tax. Eliminating or reducing the sales tax would be felt by more people than a reduction in the income tax, and have a more immediate impact.
Republicans won’t be able to eliminate the sales tax completely as long as there’s a Democrat in the Blaine House, but they should begin to fight for it anyway. If Democrats are serious about avoiding another partisan budget, Republicans might be able to insert some form of tax relief in place of some of the new spending.
An excellent place to start with would be a sales tax holiday. Such a concrete step that would benefit businesses and consumers alike without breaking the bank. It’s been debated in Maine for years, and getting it across the finish line would be a tremendous accomplishment, while simultaneously highlighting that Republicans are serious about getting tax relief to ordinary Mainers. That would be a far more significant achievement than just cutting back on spending, or getting Democrats to agree to hand out more free money as they have in past negotiations.
Jim Fossel, a conservative activist from Gardiner, worked for Sen. Susan Collins. He can be contacted at:
jwfossel@gmail.com
Twitter: @jimfossel
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