Governor has chosen tax increases

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“At this time, the governor is not interested in tax hikes,” administration spokesperson Adrienne Bennett told the Sun Journal Thursday.

Actually, at this time Gov. Paul LePage is all about hiking taxes, property taxes.

While the governor may tell himself he is not proposing to raise taxes, when you start cutting tax discounts for property taxpayers you are increasing what they pay.

And that, in anyone’s book, is a tax increase.

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The governor has, among other things, proposed ending the Homestead Property Tax Exemption for those under 65.

That tax break is enjoyed by property taxpayers who have lived in their homes for at least 12 months and it is their primary residence.

Those property owners, which must be about 99 percent of us, get to knock $10,000 off our property assessments, which reduces our property taxes. The state then makes up the difference to the community.

End the exemption and taxes go up.

The governor has also proposed ending the Circuit Breaker refund that is enjoyed by about 90,000 Maine households.

Depending upon household income, homeowners and renters can receive a partial refund of property taxes up to $1,600. The average refund is $480 annually.

The 90,000 people who have received those refunds are certainly going it consider it a tax increase when they do not. The reduction would certainly exceed what these folks gained under the governor’s income tax cut.

Then there are retailers like Shaw’s and L.L. Bean that would lose their equipment tax reimbursements under the governor’s plan.

They are smart people and will quickly see that their taxes are going up.

The governor’s plan would require schools to pay a bigger share of their teacher retirement benefits. The bigger hit would apply to cities and towns that would lose millions of dollars in state revenue sharing.

While the governor’s office likes to say each municipality is free to make its own decision about raising taxes, the reality is that either services must be cut or taxes increased.

This decision would come after years of cost cutting in municipalities across the state.

So, Gov. LePage is, this year, proposing raising taxes in order to protect the income tax cut he passed in 2011.

Critics at that time pointed out that the governor was setting the state up for a big fall two years later, but the warning was ignored.

Now, lo and behold, the governor cannot produce a balanced budget without increasing taxes for Maine’s property taxpayers.

For years, people said all Maine had to do was cut waste and duplication in state government. We can assume the governor and his people have looked in every nook and cranny and cut what they could.

The reality now is they are unwilling or unable to cut the two biggest items in the state’s budget, health care spending on the poor and K-12 education.

If there are no big cuts to be had, the only other option is to raise more money.

The governor would do that by raising property taxes. Democrats would repeal or slow the implementation of the income-tax cut, in effect a tax increase.

Others are talking about raising the lodging tax, which is now less than Connecticut, New Hampshire and Vermont, but higher than Massachusetts.

Maybe we should re-examine the soda and sugar tax that was rejected by taxpayers several years ago. Or we could increase the sales tax for two years to offset what the governor says is a temporary, two-year cut in revenue sharing.

The choice, it seems, is who should now fill the big hole in the state’s budget by paying more taxes.

rrhoades@sunjournal.com

The opinions expressed in this column reflect the views of the ownership and the editorial board.

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