AUGUSTA — In an hourlong briefing to media Monday, Republican Gov. Paul LePage said his goal, if re-elected in November, would be to eliminate the state's personal income taxes entirely by the end of his second term.
LePage invited members of the press to the official governor's residence, the Blaine House, to unveil an analysis created by Travis Brown, of the website howmoneywalks.com.
Brown was also on hand to detail his study of 15 years worth of Internal Revenue Service and U.S. Census Bureau data that he says shows states with lower or no income taxes are drawing those with wealth away from other states.
"You can see where the wealth goes," LePage said. "And everybody tells me, and I hear it all the time, 'Let's tax the rich.' If we are going to tax the rich, I ought to be the governor of Texas or the governor of Florida because that's where the rich are going."
Brown said that over the past 15 years, Maine has picked up $1.6 billion in tax revenue from people who have moved here but that's only half of what New Hampshire, which has no personal income tax, picked up over the same period.
"It could be much better," Brown said. He also said that the data also showed that over the same 15-year period, Maine lost $700 million from those who moved to Florida.
Brown said the nine states that have no state income taxes showed a collective gain of $146 billion. He said the nine states with the highest personal income tax rates lost more than $100 billion over the same period.
LePage called his ideas for eliminating the state income tax a "long-term program."
"My goal is, while I'm governor, and if I can get re-elected to a second term, that at the end of the second term we would have no income taxes in the state — God willing," LePage said. He went on to criticize the Democratic majority in the Legislature for not joining him in the effort.
"Unfortunately, with the current composition across the street, a lot of work needs to be done to achieve that," LePage said. The Blaine House is on the opposite side of Capital Street from the State House in Augusta.
He said his current budget proposal does not address the loss of revenue but he is, "just fighting to not have a tax increase this year."
LePage also said he would be more supportive of a state tax reform proposal offered by a bipartisan group of 11 legislators, known as the Gang of 11, if it was revenue neutral.
The plan offered earlier this month would cut the state's personal income tax dramatically but it does so, in part, by increasing and expanding the state's sales tax. The measure aims to collect more revenue from those who are nonresidents to Maine and in total raises an additional $150 million.
The Gang of 11 plan increases the sales tax from 5 percent to 6 percent and applies it to nearly all sales in Maine. The measure also contains some property tax relief by increasing the state's homestead tax exemption by exempting the first $50,000 of property valuation on a primary residence from property taxes — the current exemption is $10,000.
Proponents have said the reform is revenue neutral or even revenue negative when it comes to the amount of taxes being collected from Maine people.
"It's clear that if you just compare Florida against Maine, the fact that we have an income tax at all is a massive disadvantage," LePage said. "I'm saying revenue neutral is the key that we should be starting out to look for but ultimately it's to have no income tax, either personal or corporate."
LePage reaffirmed his position that he was opposed to increasing any state taxes and defended his budget proposal, which has been criticized by Democrats for shifting costs to cities and towns.
Democrats have said cities and towns will be forced to raise property taxes to cover a loss in state revenue sharing eliminated in LePage's budget plan. But LePage reiterated Monday those were local decisions and that many cities and towns could save vast amounts by consolidating services.
Sen. Seth Goodall, D-Richmond, the Senate majority leader and a member of the Gang of 11, said the property tax relief in that proposal was significant. On average, the savings for a home in Lewiston would be about $800 a year, Goodall said.
Goodall said the state's current sales tax structure was set up in a way that meant Maine collected less revenue from tourists than other states and increasing that would help offset the income tax reduction proposed in the Gang of 11's plan.
"We have the opportunity to lower the tax burden on Mainers and export that to guests and second-home owners," Goodall said. "The ones who can afford it."
Goodall also noted that Maine was benefiting from retirees who are moving here, and Brown's analysis also suggests that.
During his briefing, LePage seemed to agree that some Mainers would relocate to other states for a warmer climate in retirement regardless, but noted there were other parts of the country — and even North America — that were seeing in-migrations of wealth far exceeding Maine's that were not in warmer climates, including New Hampshire and even Quebec province.
He also said Brown's analysis focuses on income tax revenue from those still working and not from retirees.
But Democrats rebutted the notion that young families with skilled breadwinners were the people relocating to Florida to seek an income tax shelter.
"They're just not," Goodall said. He also said it was frustrating that LePage seemed to be dismissive of any bills coming out of the Legislature that didn't do everything the governor wanted, even though many of them incorporated things LePage supported.
Bipartisan bills, including ones that covered tax reform, paying the state's hospital debt, workforce development and energy policy, were all being panned by LePage, Goodall said.
"At some point, you have to start governing by consensus and the governor needs to remember when you come here as governor, you are here to govern for all the people of Maine, not just one party or the other, " Goodall said.
When asked how he expected to achieve his plan, if Democrats remained in control of the Legislature, LePage said, "I never give up, I always hope there is a chance that they will learn."