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Maine Bipartisan Coalition Set to Unveil Wide-Ranging Tax Reform Plan
04/29/2013   Reported By: A.J. Higgins

A coalition of Republicans, Democrats and independents in the Maine House and Senate is throwing its support behind a new wide-ranging tax reform plan. Details of the proposal will be released to the public on Wednesday, but legislative leaders hinted at a mix of revenue increases that could include the repeal of many tax exemptions, increases in some targeted taxes and possibly even a limited hike in the sales tax. A.J. Higgins has more.

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Maine Bipartisan Coalition Set to Unveil Wide-Rang Listen
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For months, Gov. Paul LePage has predicted majority Democrats in the Maine Legislature would try to impose new taxes on Maine residents as a way to undo proposed spending cuts in his $6.3 billion state budget plan.

It turns out the governor was right - but what he may not have counted on was that a major tax reform proposal is also being supported by some Republicans and independents in both the House and Senate. Seth Goodall is the Democratic Senate majority leader.

"Right now this has been a group of 11 legislators, five Democrats, five Republicans and an independent, and we'll be unveiling it on Wednesday," Goodall says.

The coalition also includes members of the Legislature's Taxation Committee. One committee member, who asked not to be identified, said the tax reform package has the potential of raising hundreds of millions of dollars in new revenue for the state - largely through the lifting of exemptions on numerous goods and services that currently go untaxed.

Lawmakers are under pressure from their constituents to find a way to offset a shift of more than $350 million in revenues that once flowed back to municipalities in the form of municipal revenue sharing, school funding, homeowner and rental tax relief programs, general assistance to the poor and other funds.

As the former mayor of Augusta, Republican Assistant Senate Minority Leader Roger Katz says he understands the pressures that local governments are facing. Seventy Maine cities and towns have already passed resolutions opposing LePage's budget cuts.

"We are certainly challenged by the difficulty of this budget, but we think that there really is real opportunity here for major comprehenisive tax reform," Katz says.

Neither Katz nor Goodall would elaborate on the details of their plans, but both acknowledged much of the heavy lifting to get the proposal off the ground was shouldered by independent state Sen. Richard Woodbury of Yarmouth.

Woodbury hinted at a new tax plan that would target Maine's summer tourism season and potentially provide a deeper cut to the top individual income tax rate that dropped to 7.9 percent two years ago.

"Anywhere in the realm of sales taxes, people are paying in proportion to the amount of time that they spend here, so if you come for a weekend, you spend a weekend worth of sales taxes, if you'e here for a three-month summer vacation, you spend a quarter share," Woodbury says. "So by collecting more from that part of our tax code, and taking those revenues and providing it in relief to residents through income taxes and property taxes that are targeted relief to residents, you can improve the tax situation for residents."

Seven other Republican and Democratic members of the Maine House have already signed on to the plan, whose supporters predict will attract more votes as details of the bill emerge. Independent state Rep. Joe Brooks, of Winterport, who sits on the Taxation Committee, remains undecided, but he says the plan being advanced by Goodall, Katz and Woodbury has the best chance out of all the proposals floated so far this session.

"This particular group, bipartisan group that's floating around this idea, I think right now stands the best chance," Brooks says.

And Brooks says potential opponents of the tax compromise, including Gov. LePage, should think twice about standing in the way of property tax relief. "If he has any ambitions whatsoever - whatsoever - to run again for governor, if we override his vetoes at this stage of the game, it's all over for him - political future's over. That's my prediction," Brooks says.

House Majority Leader and longtime tax reform advocate Seth Berry is not among those who have signed on to the bipartisan plan, but Berry is reportedly leaving his options open.



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