AFA Update:Thursday, February 12, 2015- Tax information, supplemental work sessions and biennial public hearings

AFA received some limited information on the Governor’s tax plan. Friday work sessions begin on the supplemental bills followed by biennial budget hearings next week.

Audio of today’s meeting is here.

Tax information

Dr. Mike Allen of Maine Revenue Services presented a portion of the information requested by Appropriations regarding the Governor’s tax plan. Actual incidence reports, necessary to seriously evaluate the impact of the Governor’s plan, will not be available until after next week’s public hearings on these proposals.

The tax families scenarios that were provided do not include property tax impacts, either of changes to the Property Tax Fairness Credit or expected increases in property taxes due to increased pressure at the local level.

Discussing the revenue generated by the proposed changes to the sales tax, Dr. Allen revealed that business-to-business services are not subject to the expanded sales tax, only sales to individuals.

Dr. Allen shared that historically the top 2% of Maine filers (12,000 filers) pay 30% of Maine’s total income taxes.

The incidence/distribution tables MRS will eventually provide will differ from the tax family scenarios due to different methods of calculating income. The scenarios include other than taxable income to estimate ability to pay sales tax etc…

Dr. Allen declined to provide an exhaustive list of proposed items or services to be newly taxed.

Rep Rotundo asked that the committee be provided with information about the impact of the Governor’s proposals on LD 1 limitations.


Friday morning AFA returns for work sessions on all of the supplemental bills heard this week. County jails will also be discussed. A new amendment, an alternative to Sen. Hampers plan, is here.

Next week public hearings on the biennial budget begin with tax items on Tuesday morning. The full schedule is available here.


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