Gov. LePage’s budget is a boon for wealthy, burden for working class

February 2, 2017

“The centerpiece of the governor’s budget is an upside-down tax plan that gives a $22,650 average tax cut to the top 1 percent while increasing taxes on average for the 80 percent of Maine families who make less than $92,000 annually. Under the governor’s plan, tax increases on most Mainers won’t pay for better schools, better roads or better jobs. Instead, the governor uses these tax hikes to pay for more massive tax breaks for Maine’s wealthiest residents.”

by Sarah Austin, Portland Press Herald, February 2, 2017

His ‘upside-down’ priorities would increase taxes for 80 percent of Maine families.

AUGUSTA — Mainers are hardworking and highly skilled. But our state lacks a clear plan to connect people with good-paying jobs in our modern economy.

Gov. LePage’s budget proposal offers no such plan. Instead, he continues to shortchange Maine’s students and communities while doubling down on tax cuts for the wealthy and large corporations.

The centerpiece of the governor’s budget is an upside-down tax plan that gives a $22,650 average tax cut to the top 1 percent while increasing taxes on average for the 80 percent of Maine families who make less than $92,000 annually. Under the governor’s plan, tax increases on most Mainers won’t pay for better schools, better roads or better jobs. Instead, the governor uses these tax hikes to pay for more massive tax breaks for Maine’s wealthiest residents.

To grow Maine’s economy, we need a different approach: one that honors the will of Maine voters, who just approved two initiatives that help put Maine’s economy back on track by raising the pay for 1 in 3 Mainers and rolling back recent tax cuts for the wealthy to better fund public education. These initiatives help improve wages across the state, increase funding for schools and ease local pressure to raise property taxes.

The governor proposes to do the exact opposite by limiting funding for schools and eliminating the homestead exemption for families under age 65. That means increasing property taxes by $300 on average for working families throughout Maine.

The governor’s budget recycles the same old policies that have already failed. In 2011, Maine enacted the largest income tax cut in its history. Six years later, Maine’s economic recovery languishes near the back of the pack among all states. In fact, four of the five largest income-tax-cutting states in recent years – including Maine – have experienced slower job growth since enacting their cuts than the rest of the country.

What Maine businesses need more than lower taxes are skilled workers, reliable infrastructure and a good quality of life for their owners and employees. Costly tax breaks like the governor has proposed actually undermine future growth by compromising our capacity to invest in our people and in our communities.

Because of his upside-down tax plan, the governor’s budget cuts funding for education, General Assistance and property tax relief and makes permanent previous cuts to revenue sharing. The governor has chipped away at each of these programs in past budgets with detrimental results: rising property taxes for families and businesses and tightening local budgets. Ultimately this diminishes education quality, public safety and community services we all benefit from.

Beyond raising taxes on families making less than $92,000 a year, the governor’s budget worsens economic hardship for thousands of Maine families by again rolling out policies that take health care away from parents and make it harder for families to obtain food assistance. The results of past efforts to do this speak for themselves. Kicking parents off health insurance led to fewer Maine kids getting health coverage and nearly one in four Maine children now live in food-insecure households.

The governor has failed to show leadership on Maine workforce development throughout his tenure as he constantly prioritized tax breaks for the wealthy over sensible policies like investing in community colleges, vocational training and targeted programs to help laid-off workers return to the workforce.

The governor has neglected our infrastructure, which we need to encourage modern middle-wage job creation. This is the first year the governor has proposed significant investment in roads and bridges, but the state needs a more comprehensive approach to infrastructure to attract industry that can thrive in a modern economy. Our broadband access is worst in the nation and our transportation, water and electricity infrastructure is old, expensive and in need of significant updates to accommodate economic development.

The governor’s proposed budget contains more of the same failed proposals that run counter to the policies voters recently approved and does nothing to address the major economic issues facing Maine.

Simply put, what Maine needs is the opposite of what the governor proposes.

We need a real plan that doesn’t just cut taxes for the wealthy and corporations while leaving everyone else holding the bag. Lawmakers should reject the governor’s budget and work together to craft a budget that invests in a stronger workforce, helps young families succeed, builds modern infrastructure, provides services our communities rely on and addresses the priorities that benefit all Mainers now and in the future.

Sarah Austin is a policy analyst with the Augusta-based Maine Center for Economic Policy.