Budget Panel Urged to Reduce Tax Breaks for Corporations to Prevent Cuts to Towns, Families

Tax Expenditure Commission Chairs present $40 million road map of savings

AUGUSTA— Key lawmakers on Thursday urged the state’s budget-writing panel to scale back corporate loopholes and tax breaks to big businesses that don’t create jobs or help Maine’s economy and to prevent funding cuts to Maine cities and towns.

“Maine families and small business can’t afford to see their property taxes skyrocket even more. We must ask large corporations to pitch in,” said Rep. Adam Goode of Bangor, who served as the House Chair of the Tax Expenditure Commission.  “Corporate loopholes and tax breaks have gone relatively untouched while programs that help Mainers, like property tax relief, Head Start, or Meals on Wheels have been on the chopping block.”

As part of the two-year budget, the commission was charged with finding $40 million in savings from the state’s billions of dollars in tax breaks. The savings will prevent further cuts to municipal revenue sharing.

The bipartisan commission of lawmakers, economists, accountants, and business leaders recommended a roadmap of savings options for the budget panel’s consideration, including reducing business equipment tax breaks for retailers, narrowing exemptions for commercial real estate development, eliminating offshore tax havens; and closing loopholes for corporate income tax filings.

The commission also created a first-ever ongoing process for determining the economic benefit of the state’s tax credits and exemptions.

“It was a top priority for us to get a comprehensive on-going evaluation of our tax breaks and credits in place, so that your committee could make informed decisions about which exemptions are helping Maine’s economy,” said Senator Haskell of Portland. “We were frustrated by the lack of participation by the LePage administration but we were able to enhance the evaluation process moving forward.”

The budget panel chairs praised the new evaluation system.

“This on-going evaluation process has been long overdue,” said Senator Hill of York, the Senate chair of the budget committee. “We must hold accountable the efficacy of these exemptions and credits just like we do with all state spending.”

Earlier this year, Governor Paul LePage proposed a budget that eliminated municipal revenue sharing and shifted $400 million in taxes to communities and their commercial and residential property owners. The Legislature passed a bipartisan budget and overrode his veto, blunting his property tax hikes and keeping the bulk of revenue sharing in place.

More than 30 House Democrats sent a letter to members of the budget committee urging them to “remain vigilant” against further cuts to revenue sharing.

Rep. Peggy Rotundo, the House chair of the budget committee, called attention to the letter during the hearing, noting that the lawmakers preferred the committee hone in on savings from closing corporate loopholes and scaling back tax credits to big businesses.

The letter from House Democrats said, “We strongly urge you to focus on scaling back tax breaks for companies like Walmart and Rite Aid; breaks for big banks on portfolio management services; eliminating accounting tricks that allow large out-of-state firms – mostly oil and gas companies – to pay less in taxes; and to work to prohibit the use of offshore tax havens.”

The budget panel will weigh recommendations from the Tax Expenditure Commission in the upcoming legislative session next year.

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