PRESQUE ISLE, Maine — Gov. Paul R. LePage was on hand Thursday night, holding the fourth in a series of town hall meetings designed to present his proposed budget and the respective changes it will bring, if approved, to citizens across the state.
The March 19 event was hosted by the University of Maine at Presque Isle, with more than 100 citizens, business and community leaders on hand.
LePage kicked off the evening by clarifying which nonprofits would be taxed under his proposed plan.
“We are not, under any circumstances, attempting to tax churches. The Constitution separates church and state. We’re not going after the Big Guy,” said LePage.
He said one of his primary goals is to make Maine competitive, both at the state and national level; to do so, certain things must take place.
“We need to get energy under control. For the past four years I’ve worked to make Maine more competitive, including with natural gas. Gov. Baker (Massachusetts) is very interested in working with us. We have the infrastructure but no gas to put in the pipe,” he said.
The governor said having a competitive edge would help keep youth working in Maine.
“About 70 percent leave and never come back. If they do, it’s usually at the tail end of their careers, either for work or family,” he said. “Another issue is our elderly. Augusta takes their money, so they’re leaving the state to keep their money.”
He also said competitiveness was necessary, in order to attract job creators and career opportunities.
“The jobs of the future are through STEM education. Those are the areas most jobs are coming from,” said LePage. “This is evident especially in the woods, where workers need to understand technology.”
To be competitive, he’s proposing the elimination of the state’s income tax, revenue sharing and the Homestead Exemption, among other things. As proposed, the governor’s budget looks to cut the tax burden for Mainers by $300 million.
“Mainers are overtaxed. Reducing the top marginal income tax rate to 5.75 percent would cut the tax burden by $300 million for Mainers. Eliminating the estate tax would mean small businesses don’t have to worry — can transfer business to family members if they so choose,” said LePage.
His budget also includes the elimination of income tax on military pensions. LePage said with troops being pulled from Afghanistan and Iraq, more veterans will be returning home and looking for a place to settle down.
“There’ll be a lot of vets retiring. We want to welcome them to Maine because they won’t be taxed. We want to attract them to Maine because they’re trained and skilled; it will help build our population,” he said.
The governor’s budget would increase the sales tax.
“While we’d reduce the personal and corporate tax, we’d widen the sales tax from 5.5 to 6.5 percent. Sales tax set a record in Maine last year with $33 million from tourists. It would be a burden to tourists who’d pay more in sales tax,” said LePage.
LePage said low- to moderate-income families and those on fixed incomes would be eligible for assistance.
“Low- to moderate-income families would receive a $250 tax credit, with those on fixed income aged 65 and older would see their Homestead Exemption doubled,” he said. “Revenue sharing would be rolled into the Property Fairness Tax Credit (PFT); 90 percent of town managers in the state see value in that.”
“They’re worried about the town, I’m worried about the people that live in the towns,” he said.
Russell Donnelly, of Presque Isle, told LePage he’d like to see more done to decrease energy costs. LePage said the State House was “using no more oil” and had switched to natural gas and electric and that “mini heat pumps are the way to go.”
Jon Frederick, town manager of Mapleton, Castle Hill and Chapman, asked “while the tradeoff for individual taxpayers may be positive, what benefit will communities like mine that are already consolidating see. What will we get back?”
LePage said he “asked the Legislature to put $5 million in two pots to help schools and communities that consolidate.”
“If you tell me how you’ll consolidate, we’ll pick up the cost,” said LePage.
The governor went on to discuss how school systems could consolidate more, specifically by sharing superintendents.
“Superintendents are winners. They’re double dippers — retire and come back to work,” said LePage. “The losers are the students and the teachers who dip into their own pockets to buy supplies, while some retire and come back — getting double pay.”
Presque Isle City Councilor Dick Engels said the city had already reduced its budget by $1 million annually.
“Either we’ll have to increase taxes or reduce services. What would you suggest we reduce” if we lose revenue sharing, said Engels.
“You’ll lose $750,000 in revenue sharing. Presque Isle residents will have $6.8 million more in pocket (from not paying income tax). I bet they’d do that all day long,” said LePage. The governor didn’t, however, indicate how citizens having more money due to not paying income taxes would help municipalities cover services affected by the loss of revenue sharing funds, without increasing property taxes.
The governor changed topics briefly, talking about the number of students needing remedial courses before pursuing higher education. He said it’s about 50 percent of those attending community colleges, while only 25 percent need such at the university level.
“We’re working, starting with this budget, so that everyone’s on the same page. Students shouldn’t have to take the same courses again,” said LePage, adding “I’m moving to get Maine students college for free. If they put in the work, we’ll pay for it.”
“I’m not critical of teachers; they’re underpaid and overworked,” he said.
The governor concluded by saying if the mining bill passes, Aroostook County will see millions of dollars and many jobs created. “I helped you argue the mining bill, you help me get rid of term limits,” he said.
“There’s a billion in gold in this county, according to geologists. I’ve never seen anyone lose money on gold,” said LePage.
