The Maine Center for Economic Policy, the liberal think tank, had its own budget proposal, which is quite modest in its goals. It would meet the state’s obligation to fund schools, restore the amount of money distributed to cities and towns to reduce property tax and increase the tax credit for low-income workers. To balance the budget, they recommend tax increases ranging from one-tenth of 1 percent on income over $100,000 to 1.8 percent on income above $489,000.
In a state where half the families make less than $56,000 a year, you would think that such a plan would have a lot of appeal. But touching tax rates is considered politically unwise.
You have to ask, what’s so special about these rates? They didn’t come down off the mountain with Moses. They were introduced by a one-time governor and current talk radio personality named Paul LePage, who came to office with Republican legislative majorities in 2011.
They cut the top income tax rate from 8.5 percent to 7.15 percent, and then cut spending in ways that forced cities and towns to raise property taxes. MECEP estimates that the state will take in about $880 million less over the next two years than it would have if the 2010 tax rates were still in place. So if Mills’ budget were to pass without any new taxes, expect to see continued pressure on middle-class property taxpayers to protect a small number of high earners from paying a little more.