MECEP Urges Appropriators to Consider All Revenue Options to Balance the State’s Budget

“There are better options than shifting costs to property taxpayers”
Augusta, Maine (Wednesday, June 5, 2013) Garrett Martin, executive director of the Maine Center for Economic Policy (MECEP), criticized the refusal yesterday by Republicans on the legislature’s appropriations committee to discuss alternatives for raising revenue to close Maine’s budget shortfall.

“Maine working families need a budget that funds our schools, protects our elderly and disabled, and gives our economy a boost without crushing property tax increases,” Martin said. “The governor’s budget slashes education and other basic services while raising property taxes on middle income families. Lawmakers must choose wiser, fairer, and more transparent tax increases than the ones the governor proposed.”

Martin noted that the appropriations committee has already unanimously approved several proposals that will require additional funding or deeper cuts elsewhere in the budget. The committee will also likely reject the governor’s proposal to suspend revenue sharing and cut property tax relief for Maine residents requiring even more additional revenues.

“The governor’s budget proposal raises taxes on middle-class Mainers,” Martin said. “Legislators cannot balance this budget and avoid the largest property tax increase in Maine’s history without identifying other sources of revenue. There are better options than shifting costs to property taxpayers.”

MECEP urged the appropriations committee to discuss the recommendations from the taxation committee on May 22, including:
• Delay the 2011 income and estate tax cuts to restore approximately $400 million in the biennium.
• Equalize taxes for the top one percent of Mainers so that they pay an effective state and local tax rate equal to what the average Mainer pays.
• Increase the meals and lodging tax to the New England average generating approximately $180 million over the biennium.
• Enact a temporary sales tax increase to 6% which is projected to increase revenue by approximately $150 million per year.
• Identify targeted savings of $30 million through a tax expenditure task force.
• Increase the cigarette tax by $1.50 a pack and equalize other tobacco products to raise approximately $65 million per year.

As the current budget debate unfolds, MECEP is available for the appropriations committee, the media, and others to discuss revenue alternatives and their impact on the state budget and the fairness of Maine’s tax system.