GOP leaders refuse to back any budget with income tax surcharge

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AUGUSTA — Months ago, Gov. Paul LePage called on Republicans to “fix bayonets” as he prepared for battle against legislative Democrats over his proposed two-year $6.8 billion budget proposal.

On Thursday, they did just that.

The GOP leaders in the Senate and House issued a joint statement declaring that no spending plan that included the voter-approved 3 percent surcharge on income taxes of those earning more than $200,000 annually would gain their backing.

“It is not going to stay,” said Rep. Bruce Bickford, R-Auburn. “We will not have a budget if the 3 percent is in it.”

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Senate President Michael Thibodeau, R-Waldo, and House Republican Leader Ken Fredette, R-Newport, said Maine can’t allow the “onerous” tax hike to go into effect that would give the state  “the dubious distinction of having the highest tax bracket in the nation.”

Democrats remain committed to carrying out the will of voters who adopted a ballot question in November to sock the wealthiest Mainers with a tax increase in order to come up with the money to improve schools.

But they’re also sounding as if compromise is inevitable as budget talks begin to turn more heated.

Rep. Bettyann Sheats, D-Auburn, said politicians on both sides will “come to the center” as they seek to work out the details of a spending plan that can win two-thirds of the votes in both houses of the Legislature.

The Democratic House whip, Rep. Jared Golden, D-Lewiston, said that since LePage has vetoed every other budget since taking office, lawmakers assume he’ll do it again no matter what they come up with. That means it’s necessary to work with their Republican counterparts to ensure there are GOP votes for a plan that can overcome a veto.

Sheats said legislators may be willing to adjust the percentage of the tax hike or revise the income level where it takes effect.

The important thing, she said, is to make sure LePage’s proposed “outrageous cuts” don’t happen and that the state makes some needed investments as part of the budget.

Golden said legislators shouldn’t ignore the reality that voters approved the 3 percent surcharge. People want more school funding, he said, and they can’t afford to pay more property taxes to make it happen.

Rep. Roger Fuller, D-Lewiston, said that when people backed the surcharge, they knew exactly what they were doing. He vowed to be “militant and aggressive” in pushing for a budget that reflects the public’s will.

Grady Burns, a Democratic Auburn city council member, said the Legislature should “stand firm” on the surcharge because the additional money for schools “will have a very real impact” on education and property taxes.

Sen. Nate Libby, D-Lewiston, said the surcharge was “designed to help the state meet its obligation” to cover 55 percent of educational costs for kindergarten through high school across Maine.

Rep. James Handy, D-Lewiston, said the surcharge referendum arose because legislators failed to fulfill their obligation to come up with the 55 percent funding required under an earlier ballot question. It became necessary, he said, “for the people to rise up and force the hand of the Legislature.”

Golden said getting the money is a necessity and the surcharge is a solution Mainers got behind because they can’t afford more taxes on working and middle class families.

But GOP legislators, including Bickford, said they’re worried the surcharge will cause high earners to leave Maine or avoid coming to the state.

“This is not a partisan issue,” Bickford said.

“I am certain we can honor the spirit of what voters asked for without hurting our businesses and discouraging investment in Maine,” Thibodeau said. “We need a budget that won’t bankrupt Maine’s economy.”

Trying to hash out a deal with the GOP is going to require “a tough budget negotiation,” Golden said, but he’s sure it can be done.

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