AFA Update- Wednesday, February 18- Tax proposal public hearings

This week Appropriations and the Taxation committees have held public hearings on the tax portions of the Governor’s proposed biennial budget. Monday was devoted to changes in the income tax, Tuesday afternoon saw testimony from municipal officials in opposition to the elimination of Revenue Sharing.

Audio of Wednesday’s hearing is available here.

Income tax changes

Commissioner Rosen presented testimony in support of reductions in income tax rates and the elimination of the estate tax.

Several advocates and other members of the public spoke in opposition to these changes.

Below is the statement from the Speaker, Rep. Rotundo and Sen. Valentino on Monday’s hearing.

 

Public Hearing Raises Questions for Democratic Lawmakers Over LePage Budget

 

Tax cuts largely benefit wealthy while sidelining Maine families, education and job training

 

AUGUSTA —  Future investments in Maine families, education, job training, as well as local support for firefighters and public safety are put at risk by the Governor’s $6.5 billion budget.

The strong concerns were expressed by opponents of the budget on Tuesday during the first public hearing on Governor Paul LePage’s changes to the income and estate tax rates.

“We haven’t been getting the the full story about Governor LePage’s budget,” said Rep. Peggy Rotundo, the House Chair of the Appropriations Committee. “I’m deeply concerned that the ratcheting down of state revenues in the out years will mean fewer dollars in the future for workforce development, education, and many of the very things businesses and workers say we need to succeed. We want a tax reform plan that is paid for now and in the future so we don’t jeopardize our support for Maine families, our schools, or workforce, or for our local firefighters and police.”

During the hearing, members of the public warned the reduction in the $400 million in revenue would result in significant cuts to the state budget, prompting lawmakers to request a six year budget impact analysis from Maine Revenue Services and the Department of Administrative and Financial Affairs.

Members of the public also pointed to other states such as Kansas, where similar tax policies that benefit the wealthy have undercut the economy and critical funding for services.

“I support tax reform but this budget sidelines Maine families at the expense of the wealthy and big corporations,” said Senator Linda Valentino of Saco. “We heard a lot of concerns from people today about the elimination of the mortgage interest deduction, the Homestead exemption, and the property tax deduction. If these deductions are eliminated, it will jeopardize Maine’s economic recovery.”

Lawmakers also requested data and information on the net impact of the budget for Maine families, including the property and sales tax changes.

A recent study from the Institute on Taxation and Economic Policy shows such policies hurt middle and low income earners.

Public hearings on the tax portion of the Governor’s budget will continue throughout the week.

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Revenue sharing

Commissioner Rosen presented testimony in support of the Governor’s plan to eliminate Revenue Sharing.

Over 40 municipal officials presented testimony in opposition to the elimination of Revenue Sharing.

Public testimony part 1
Public testimony part 2

The first piece of testimony in the first package of testimony is from former Republican legislator and LePage appointee Ken Fletcher. Fletcher presents a ringing condemnation of the elimination of Revenue Sharing and its drastic impacts on his town of Winslow.

Schedule

Tomorrow the committees reconvene to hear public testimony on the property tax aspects of the Governor’s budget:

  • Changes to BETR/BETE
  • Elimination of the Homestead exemption for those under 65 years of age
  • Property taxes on non-profit organizations
  • Tree Growth

Monday at 10:00 am the public will offer their thoughts on proposed changes to sales and service provider’s taxes.

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