Taxes that pour the most money into Maine coffers have gotten more regressive since 2012
Good morning from Augusta. The three taxes making up the bulk of Maine’s revenue stream got slightly more regressive between 2012 and 2017, with state residents paying approximately $322 million in income, sales and property taxes during that five-year period.
Taxes are fueling a nuanced debate in Maine politics this year. Gov. Janet Mills submitted a budget proposal containing no tax increases. However, some progressives want to undo past income tax cuts, and property tax relief is one of the highest-priority items for the new Democratic-led Legislature. Meanwhile, conservatives worry about a spending hike in Mills’ budget.
A regular report released last month by Maine Revenue Services shows how the era of Gov. Paul LePage led to less state reliance on the income tax, the only one of the three key taxes that hits higher earners harder than lower earners. The report also shows a LePage-era shift to more reliance on taxes that hit lower earners harder as a share of their overall tax rate.
Maine took in slightly less income tax revenue between 2012 and 2017, but more in sales and property taxes. Maine residents paid nearly $3.2 billion to state and local governments in 2012, according to a previous state report. In 2017, that figure was up to more than $3.5 billion, but the increase was born by the regressive sales and excise and property taxes.
The sales tax fell from 43 percent of that mix in 2012 to 38 percent in 2017, while property taxes jumped from 30 percent to nearly 32 percent. The sales and excise tax went from roughly 27 percent to 30 percent. (Rounding keeps those figures from equaling 100 percent.)
It’s not surprising, since LePage’s tenure began with the largest income tax cut in Maine history under a Republican-led Legislature. The sales tax rate was 5 percent in 2010 and is now 5.5 percent, and local property taxes have risen with state revenue sharing shorted by $700 million since the recession, according to the Maine Municipal Association.
Maine’s top 1 percent of earners has seen their average effective rate on those three taxes drop from 8.15 percent to 7.74 percent over that period. They still pay a slightly higher average share than people between the 20th and 80th percentiles, but people in the lowest 20 percent pay 10.7 percent, which is up from 9.16 percent in 2012.
This makes Maine’s direct tax system more regressive now than it was in 2012, although a measure used by the state finds the three taxes — driven by the income tax — are slightly progressive overall. The system tilts toward regressivity when business taxes are included.
Democrats are in for a difficult debate on taxes this session. There are reams of proposals before the Legislature this year to address property taxes, which are wrapped up in several other issues including the share of school funding footed by the state.
Mills has committed $126 million more in her budget proposal, but it’s still $200 million short of a threshold once set by Maine voters that has never been met. Her budget also increases revenue sharing to cities and towns, but raises it over two years from 2 percent to 3 percent — far short of the 5 percent mark of full funding.
Many Democrats will want more, but they would need more revenue to work with. Republicans will resist that, leaving Mills in an interesting place by the time a budget becomes final this spring.
Today in A-town
A government watchdog group and a handful of legislative committees will meet today. In committee, bills seeking better funding and support for county jails and homeless veterans are up for discussion, as are efforts to restore shoreland zoning rules and climate resiliency measures on coastal infrastructure and restore regular mapping of eelgrass beds
Beginning at 9 a.m., the Government Oversight Committee will hold a public hearing on its February report from the Office of Program Evaluation and Government Accountability that showed frontline child welfare caseworkers are overworked.
— A former Connecticut prosecutor had concerns about Maine’s medical examiner, but it does not appear to have affected his work here. After a judge ruled that expert testimony delivered by Dr. Mark Flomenbaum in a 2016 Connecticut manslaughter case was not credible, the prosecutor in the case wrote to Mills, then the state’s attorney general, to share concerns. The document, verified by the Maine attorney general’s office on Thursday, shed new light on how Mills’ office became aware of that testimony, which came as part of Flomenbaum’s outside employment as a consultant on out-of-state cases while working as medical examiner under Mills when the Democrat served as attorney general. The governor’s office told the Portland Press Herald last month that as attorney general, Mills was “not aware” of Flomenbaum’s outside employment, though the letter was addressed to her and an August 2016 motion from her office in a Maine case said Mills allowed Flomenbaum to testify as an expert witness in out-of-state cases. Mills’ spokesman said she did not recall seeing the letter. Defense attorneys in Maine have tried to cross-examine Flomenbaum, the state’s medical examiner since 2014, about the Connecticut case, but judges have not allowed it.
— The new governor wants a court to throw out a lawsuit a state senator from her party filed against the old governor. It involves LePage’s decision not to fill public health nursing vacancies, despite legislation mandating that he do so. In a brief filed this week in Kennebec County Superior Court, the Maine Department of Health and Human Services asked a judge to dismiss the lawsuit that Sen. Brownie Carson, D-Harpswell, brought against the LePage administration last July after it missed a legal deadline to bring the state’s public health nursing program back to full staffing. Lawyers for the attorney general’s office, who are representing the department, said the lawsuit is moot because the department has launched multiple recruitment efforts to fill vacant positions.
— An early roll-call vote in the new Maine House of Representatives looked a lot like roll-call votes in the last House. Despite having more members in this Legislature, House Democrats failed to muster the two-thirds majority needed to pass as an emergency measure a bill from Senate President Troy Jackson, D-Allagash, that would make aid available to unpaid federal workers during shutdowns. Most Republicans in the House voted against the bill, preventing it from passing as an emergency and sending it back to the Senate. While the decreased likelihood of a federal shutdown makes Jackson’s bill largely symbolic, the inability of House Democrats to sway enough Republicans and independents to their side undercuts early odes to legislative bipartisanship and reinforces the fact that Democrats can’t roll over minority Republicans on a budget bill, constitutional amendments and other emergency legislation, all of which require support from two-thirds majorities in each chamber to pass.
— Advocates for eliminating youth incarceration Maine issued their blueprint on how to achieve that goal. The report, called “Place Matters,” urges Maine to shift away from confining youth in institutional settings and, instead, invest in a range of programming that supports their ability to live at home. It was written by Mara Sanchez and Erica King, both of the Justice Policy Program at the Muskie School of Public Service, and Jill Ward of the Maine Center for Juvenile Policy and Law at the University of Maine School of Law. “Our biggest hope in putting this out there is that it will be a rallying document,” Sanchez said.
Slippery when wet
Just yesterday, I thought I had discovered the coolest new use of seaweed when I read about how the DLT — a dulse, lettuce and tomato sandwich — had taken the New Brunswick culinary scene by storm. [Don’t even think about mocking New Brunswick cuisine. I have devoured some delightful fish and potatoes there.]
But then I woke up to this revelation from the BDN’s Troy R. Bennett: A Maine woman is making a seaweed-based, all-natural sexual lubricant.
“This is a personal and massage lubricant that can be used for any sort of sexual activity,” said Mariah Curtis, 26, a Portland woman who grew up mostly in Orono. “It’s safe to rub it all over your body. It’s totally absorbable — or you can wash it off. It’s for any part of your body you want to have slick or wet for any reason.”
It also appears to be green.
Happy St. Patrick’s Day. Here is your soundtrack. — Robert Long
Today’s Daily Brief was written by Michael Shepherd, Alex Acquisto and Robert Long. If you’re reading this on the BDN’s website or were forwarded it, click here to receive Maine’s leading newsletter on state politics via email on weekday mornings. Click here to subscribe to the BDN.
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