By Troy Haines
No issue is more important to a new gubernatorial administration than its budget, and no issue affects the direction of the state as much. The debate about LePage’s proposed budget tends to center on anecdotal evidence and personal investment rather than facts. It is important to look at the facts of how this budget affects Mainers. As Rep. Mark Eves of North Berwick said when discussing the budget, “We are entitled to our own opinions, but not our own facts.”
Moving forward it is necessary to address the issues of inefficient government spending and the negative impacts of excessive taxation during a recession. If we want our economy to recover we need to stimulate it and the best way to do that is to put more money in the pockets of the people earning it. As with any budget cuts there are painful choices to be made and as Governor LePage says it will require “shared sacrifice.” Let’s examine how LePage’s vision of “shared sacrifice” accomplishes reducing the budget.
The budget eliminates a significant portion of property tax supports resulting in the loss of over $400 in assistance to over 75,500 Mainers. Significant reductions in general assistance funding to municipalities and a 32 percent reduction in revenue sharing result in over $90 million being shifted into municipal taxes, principally onto middle-class Mainers.
About 25,000 seniors will lose all or some support they currently receive in paying their premiums, co-payments and deductibles for to Medicare parts B and D, as well as the cost of prescription medications.
There will be a 10 percent reduction in the business equipment tax reimbursement program, which adversely affects rural Maine and will result in significant job losses here.
Also a myriad of cuts to many other programs that assist not only the poor, but programs used to offset costs for working-class Mainers. In addition, this budget would result in the loss of health insurance for thousands of Mainers who are currently insured.
Going through these issues point by point a trend begins to emerge. All of the increases affect only the poor and working-class Mainers, with significant adverse effects on low-income seniors and children.
Let’s look at what we are making these reductions for. The budget includes $203 million in tax breaks which benefit all Mainers. Here is a look at how Mainers of different income levels benefit: Low-income earners (under $21,000) and middle-income earners up to ($48,050) will see maximum income tax breaks of about $6 and $83 respectively. High-income earners will see maximum income tax breaks of around $874 dollars. The highest-income earners (more than $360,000) would see maximum income tax breaks of around $2,770.
To put this into perspective, 90 percent of Mainers are low- to middle-income earners. When you take into consideration the estimated $90 million that the budget shifts into municipal taxes, full implementation of the budget means that over 80 percent of the tax breaks go to earners making over $119,783 per year, or the top 10 percent of earners. Eighty percent of the tax breaks go to the wealthy.
What do the total savings amount to for Maine taxpayers? This budget is $500 million larger than the last one. A half-billion dollar increase to Maine taxpayers is the cost of these program and support cuts to 90 percent of Mainers, and handouts to the other 10 percent.
Now let’s look at some of the things the governor has said about this budget. We will all “share the sacrifice” and “feel the pain.” Not true — as a matter of fact LePage exempted his salary from the increase in public employee contributions — the “pain” will be felt by the people of this state struggling to get by who now find themselves with no safety net, and by the working people of this state who are paying the bills for everyone. It will be felt by the homeowner who gets his extra $83 in income taxes while paying his additional $400 in property taxes.
No cuts create any significant adverse effect on the wealthy. Not one increase is being bourn by Maine’s top 10 percent of earners, yet they are reaping the significant brunt of benefits. Why? The excuse being given is that by giving money to the wealthy you stimulate economic growth because they will create jobs. We all know this isn’t true. If a working family gets a tax break they buy groceries. They pay their mortgage, they buy the new TV they have wanted for years but haven’t been able to afford. They buy their children clothes. These things all stimulate economic growth. If the richest among us get a tax break, it goes into their account, their portfolio, not the economy.
We’ve tried trickle-down economics before, and it resulted in the collapse of our economy and the outsourcing of our jobs. It simply doesn’t work.
Paul LePage stated in his budget address that “We will lower the top income tax bracket from 8.5 percent to 7.95 percent, its lowest level since 1975. This budget provides real tax relief to struggling families and begins the process of making business success more affordable in Maine.” Anyone can see the absurdity of this statement, as lowering the top income tax bracket in no way benefits struggling families.
The bill for $90 million in new municipal taxes is not going to come with an Augusta return address. For me it will come from my town office in Mapleton. Many people will be placing their anger at these tax increases in the wrong place. They will be blaming their local town managers, when the culprit for these tax increases is the Governor and the Legislators who are not only supporting this bill, but touting its benefits in extremely selective ways by holding up very narrow aspects without addressing the whole.
Governor LePage promised to “put people before politics,” and we have at last come to one promise that he has kept. He has certainly put Maine’s wealthiest people first.
Troy Haines of Mapleton is the chair of The Aroostook County Democratic Party. He can be contacted at 207-551-1301 or via e-mail at gyre1976@yahoo.com.
