Health care, property tax reform, education top priorities for gubernatorial candidates

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A newly elected governor will get at least one chance to make a bold statement of intent with his first legislative proposal in office, his “LD 1.”

That first initiative may not be the most remembered initiative or even the most impactful of a governor’s four-year term, given unforeseen incidents such as recessions or ice storms that can interrupt even the most well-crafted policy agendas. But it’s a bill loaded with symbolism, representing the No. 1 priority for an incoming executive with four years in the Blaine House ahead of him.

Perhaps not surprisingly, the three candidates for governor this year — incumbent Republican Gov. Paul LePage, Democratic U.S. Rep. Mike Michaud and independent Eliot Cutler — have drastically different plans for their first legislative act, each with varying likelihoods of making their way into law.

Mike Michaud

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Michaud says his LD 1 would be the “unfinished business” of Medicaid expansion. In 2010, President Barack Obama’s signature health care reform law, the Affordable Care Act, opened federal coffers to states that expanded the Medicaid program to all residents with incomes lower than 138 percent of the federal poverty level, or about $16,000 per year for a childless, single adult.

Most projections indicate expansion would result in roughly 70,000 Mainers gaining access to Medicaid if the state accepted the expansion. The federal government would pay the full cost of expansion for most of the newly covered population through the end of 2016. After that, its share of the cost will drop, incrementally, to 90 percent.

“I want to make sure that Mainers can see a doctor when they’re sick, and I want to make sure that Maine can take full advantage of the federal law,” Michaud said in a written statement to the BDN.

Majority Democrats in the Legislature made expansion their top policy priority during the past two years, and passed five different bills to expand coverage. However, Republicans, led by LePage, resisted, saying the expansion would cost the state too much money. Democrats were not able to muster the support necessary to override LePage’s vetoes.

Michaud said expansion would have a near-immediate impact on the state. It would provide health insurance to low-income Mainers and create 3,000 additional jobs in the state’s health care industry, he said, citing White House figures. Michaud also said expansion would save hospitals hundreds of millions of dollars in bad debt and charity care.

Assuming the Democratic Party retains control of both chambers of the Legislature, expansion could feasibly be done in the early days of the first regular session under a Michaud administration. However, if Republicans regain control of the House or Senate, the effort may be doomed. While a handful of GOP lawmakers has supported expansion, the party as a whole has opposed it.

Eliot Cutler

To Cutler, the top priority is property tax reform. Cutler’s is undoubtedly the most ambitious LD 1 offered by any of the gubernatorial candidates, and the most likely to fail.

“Property taxes increasingly place a disproportionate and regressive burden on particularly vulnerable groups of Maine people,” Cutler said. “Seniors on fixed incomes, students in underfunded schools, farmers who are pushed off their land and fishermen who are driven from the shore are all among the casualties of Maine’s growing dependence on property taxes.”

The Federation of Tax Administrators reports that property taxes made up 41 percent of state and local taxes in 2010, the most recent year for which data are available. Meanwhile, 28 percent of Maine’s tax revenue came from the sales tax and 27 percent from income tax.

State funding for local services took a hit under Le­Page’s administration. Those cuts, in addition to a near-constant underfunding of the state’s share of education costs, caused local property taxes to climb in recent years, according to municipal officials throughout Maine.

Cutler’s plan calls for shielding up to $50,000 of property value from taxation through the homestead exemption program, which is currently capped at $10,000. It increases state aid to municipalities by $100 million, and state funding for schools by $75 million — both of which would drive down local property taxes.

The plan would be paid for by increases in Maine’s sales tax. Cutler said either a straightforward increase from 5.5 percent to 6 percent, or a seasonal 2 percent increase would be enough to cover his property tax reduction proposal. All told, he said, the plan should lower property taxes by 20 percent to 40 percent for the average Maine homeowner.

But if history is any lesson, Cutler’s ambitious LD 1 proposal would face an uphill battle, to say the least, as attempts at tax reform have been stymied for decades. Like Cutler’s plan, each prior proposal relied on increases or expansions of the sales tax to pay down reductions elsewhere in the tax code.

Plans proposed in 1987, 1997, 2003, 2007 and 2013 were killed out of hand. A 2009 proposal made it further than any other, passing the Democrat-controlled Legislature despite stiff opposition from businesses — including contractors, auto dealers and real estate agents — whose services would be subject to new or increased taxes. The tax reform plan inspired a Republican-driven repeal campaign, and voters overturned it decisively in June 2010.

Paul LePage

LePage signaled that a shift in education toward job training would be his first priority in a second term. The details of that shift, however, were left unspecified.

The governor did not directly comment for this story. However, his spokesman, Alex Willette, said LePage would focus on ensuring businesses in Maine have “qualified applicants to fill jobs.”

“We need to get our community colleges, continuing education programs and universities to focus on jobs of the 21st century,” Willette said. “Manufacturing, biotechnology, medical; kids need to have the skills ready to enter those jobs.”

The governor’s campaign did not offer details on how he would try to meet that goal, or what specific legislation would be proposed, but said a public-private partnership would help ensure the workforce needs of the future are met.

In his first term as governor, LePage supported a successful push to allow charter schools in Maine. Since then, several charter schools focused on science, technology, engineering and math have opened, including ones in Hinckley and Harpswell. He also supported expansion of the so-called bridge year, which allows high school students to obtain college credits from local Maine Community College System schools.

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