MAINE SENATE REPUBLICANS SUPPORT TABOR RESURRECTION BILL

AUGUSTA – Senate Republicans led the charge today in support of a measure that resurrects the publicly-rejected TABOR proposals in a vote of 21 – 11. The bill would put the state budget on autopilot and shift costs to property taxpayers.

Democrats fought against the irresponsible and unfair proposal warning that this dangerous proposal would undermine funding for schools, roads, public health and safety.

“This bill fast-tracks an irresponsible idea that may sound great but will devastate our commitment to our schools, public safety and other municipal obligations,” said Senator Justin Alfond, the Assistant Senate Minority Leader.

The bill, LD 849 would ratchet down state revenues by gradually lowering Maine’s income tax rates to a flat 4 percent, with 75 percent of the benefit going to the top 20 percent of taxpayers. The bill would reduce the state income tax revenue by $600 million per year.

The original proposal uses 40 percent of one-time surpluses that would typically be put in the state’s “rainy day” fund to make permanent cuts without paying for them in future years. The surplus only pays for the cuts in the first year. The measure was adopted with a floor amendment that lowers it from 40 percent to 20 percent.

“This is the wrong way to go,” said Senator Chris Johnson of Somerville. “Giving a sizable tax break to those Mainers with the highest incomes while providing almost nothing for those who are struggling is simply not fair, particularly when the mechanism pushes more and more on to property taxes.”

Johnson added, “We need to be focusing our efforts on a fair balance of lowering property taxes through fully funding state aid to education, fully funding municipal revenue sharing and fully funding the Circuit Breaker program. The Senate said no to those measures that would provide real relief for Maine people.”

A new analysis by Maine Revenue Services shows the Republican TABOR bill, would give an average tax reduction of only $1 to the bottom 20 percent of income earners. This group includes, for example, a single parent of two working full-time at minimum wage. It also includes many low-income seniors without pensions, who depend on Social Security. By comparison, the tax cut would give an average reduction of over $21,000 to the wealthiest 1 percent of Maine residents. This group makes an average adjusted income of roughly three quarters of a million dollars.

The bill remains in non-concurrence with the House and will go on to the House for further consideration.

###