AUGUSTA — Members of the Republican Party said Thursday they can’t support the part of Gov. Paul LePage’s two-year spending plan that cuts millions of dollars from municipal budgets.
State lawmakers, including current and former small-town selectmen from parts of rural Androscoggin and Franklin counties, said they couldn’t support LePage’s plan to stop — even temporarily — state tax revenue-sharing with local towns and cities.
Rep. Jeff Timberlake, R-Turner, said he supports LePage, mostly. “So, we aren’t throwing him under the bus or anything, but local governments have been cutting their budgets for 15 years.”
Timberlake is among those who openly say they can’t support $200 million in cuts to local governments in the form of a revenue-sharing reduction. The state currently shares some of the revenue it collects from the sales tax and other sources with local governments. The original intent was to ease the burden on Maine’s property taxpayers.
Both Timberlake, a former selectman, and his colleague, Rep. Russell Black, R-Wilton, a current selectman, said the cuts would result in local property tax increases.
LePage Press Secretary Adrienne Bennett pointed out that the reductions don’t mean an automatic increase in property taxes. That would be a “local choice,” she said.
“You’ve heard a lot from opponents about what they don’t like about this,” Bennett said Thursday. She said the most difficult part of the governor’s budget plan was the reduction in revenue-sharing. “But where else are you going to get the money?”
LePage is expected to speak to the issue Saturday during his weekly radio address on the stations of the Maine Public Broadcasting System.
David Sorenson, a spokesman for House Republicans, said the portion of municipal budgets that comes from revenue-sharing, even for cities like Lewiston that receive the largest amounts, is 2 to 3 percent.
Both Bennett and Sorenson acknowledged the budget proposal is a tough sell to many Republicans in the Legislature.
Bennett said she fully expected the Legislature to be negotiating a final budget deal until its deadline of June 30. Lawmakers, both Democratic and Republican, have said they don’t want to force a state-government shutdown with an impasse. But most, at least off the record, acknowledge that’s the direction the current standoff is heading. So far, Republican LePage has refused to meet in person with legislative leaders of the majority Democratic Party.
Sen. Tom Saviello, R-Wilton, last week proposed increasing taxes on any earned income over $250,000 that didn’t come from investments. Bennett said flatly Thursday that tax increases were not an option for LePage.
While he doesn’t support increasing taxes in most forms, LePage’s budget proposal adds some new taxes, including a tax on the sale of newspapers and other types of published periodicals. The governor also backs collecting tax on Internet sales.
A general sales tax increase or an increase of the tax for certain service sectors such as lodging and restaurants remains firmly off the table for LePage, Bennett said during an informal conversation.
“At this time, the governor is not interested in tax hikes,” Bennett said.
Republicans are far from united on which taxes to increase, if any.
Timberlake said Thursday he thinks Saviello’s idea, like LePage’s revenue-sharing reduction, is a non-starter for most lawmakers, including most Republicans.
Saviello’s hike would affect about 4,100 people, Timberlake said. Some, maybe most, also own homes in other states and would move out of Maine completely if their income taxes were increased here, he said.
“If the state of Maine goes so far as to say, ‘We are now going to tax you more because you earn $250,000 or more,’ there’s an awful lot of those people that are going to take that as a slap in the face,” Timberlake said. “And they are going to say, ‘OK, I’m all done with the state of Maine.'”
In the end, Timberlake said, the state would lose revenue.
“If I lose a third or a half of those people who decide to change their residence to get away from paying a tax, then I haven’t gained anything,” he said. “I’ve lost a lot of revenue for the state of Maine.”
Saviello’s suggestion would raise between $4 million and $5 million. LePage’s proposal to tax newspaper sales would add about $5 million.
Many Republicans, mostly off the record, said they don’t support adding a sales tax to newspapers.
They noted that tax would fall mostly on the elderly or others not connected to the Internet who depend on printed news products for much of their local information. The tax also penalizes an industry that employs thousands of workers and contributes to the state’s economy.
“I don’t favor that at all,” Timberlake said.