Florida, Ohio, Wisconsin, Pennsylvania, Michigan, and Maine. What do they have in common? As of November 2010, these states (along with 11 others) elected a Republican as governor. Something else they share is that these states are all considering a state budget based on the blueprint developed by Texas Gov. Rick Perry. Perry, chair of the Republican Governor’s Association and architect of GOP’s gains in gubernatorial offices across the U.S., has been systematically ripping apart the middle class in Texas and widening the gap between the “have” and “have-nots”.
Here at home, the Tea Party and GOP supporters are quick to praise Gov. Paul LePage and GOP legislative budget proposals. Both look at roughly $200 million in cuts. They also share other dubious similarities; the plans lack imagination or approaches that will actually help Mainers.. These proposals are really just a completed “Mad Lib” budget. You remember “Mad Libs” right? Perry has created the blanks and Republican governors and legislators across the county simply fill them in. In this case, each state is creating a budget package that hurts middle and lower income workers, attempts to dismantle unions and bargaining units, and provides tax breaks and incentives for those who are already better off.
Gov. LePage’s budget proposal and that GOP legislative version are very much the same, they take the same pots of money and engage in creative accounting that would make ENRON proud. Their $200 million is a net tax shift — moving money around, mostly taking it from backs of teachers, retirees, at-risk children, and the elderly and disabled, as well as property taxpayers.
To line the pockets of a few and slide votes into their back pockets, Gov. LePage and GOP legislators are cutting local general assistance programs, placing restrictions on TANF, and making cuts to drug benefits and medical reimbursements for 48,000 older Mainers.
Two years from now when your town has to raise taxes to provide you with the same services, you will only have Augusta to blame. Republicans are looking at $91 million in cuts to revenue sharing, money that your town or city will have to make up. While Democrats are trying to reduce property taxes for all taxpayers by restoring revenue sharing to the municipalities, Republicans are looking to reduce the tax burden on wealthy Mainers.
The GOP and Gov. LePage have dueling estate tax plans that will put money in the pockets of those who need it least. Gov. LePage and GOP leadership have yet to develop a plan for paying for this windfall that benefits a few hundred people, while hurting thousands of Mainers. Under current law, family members only pay the “death tax” when the value of those estates surpasses $1 million.
Just this week the Senate gave preliminary approval to bump up that exemption to $5 million, conforming Maine’s tax code with the federal government’s estate tax exemption.
As part of his tax reform/budget package Gov. LePage’s has proposed doubling the exemption to $2 million. Under his plan the average tax benefit to these families will be $100,000. The governor would also like to see a reduction in the top income tax rate from 8.5 percent to 7.95 percent. Both initiatives will help wealthy Mainers, and will require additional, future cuts.
Not yet paid for, should the governor’s plan become a reality, it would require $400 million in additional cuts. Since the governor has taken the “Taxpayer Protection Pledge,” he has vowed to never raise taxes (a promise he has already broken by signing LD 133, Maine’s health insurance bill will require Mainers to pay a tax to have health insurance), he’ll have to cut $400 million worth of services that will undoubtedly take a toll on Mainers who are already struggling.
Republican claims that Maine’s estate tax is driving wealthy individuals away is unfounded. As Sen. Justin Alfond (D-Portland) pointed out, it is Maine’s overall tax structure that should be overhauled, a piecemeal approach will not solve the problem.
As economist and N.Y Times columnist Paul Krugman recently pointed out, “the modern conservative theory of budgeting — the belief that you should never raise taxes under any circumstances, that you can always balance a budget by cutting spending,” has yet to prove successful in any state. The approach that Gov. LePage and the GOP-controlled legislature is taking to their first budget is a model that has a documented history of hurting lower and middle class Americans and shifting burdens on to municipalities while providing tax breaks to the wealthy.
What the people of Maine need is for our governor and legislature to stop worrying about what other states are doing. We have a unique set of challenges that require “outside-the-box” remedies. Mimicking the failed approach of other states such as Texas will not move Maine forward.