AUGUSTA — In reaction to Gov. Paul LePage’s State of the State address Tuesday, both Democrats and Republicans seemed to be keeping open minds to a pending budget proposal that many said is “bold and visionary.”

Democrats, including state Rep. Peggy Rotundo, D-Lewiston, were more reserved in their praise of LePage but still offered an optimistic tone about reaching compromise in a bipartisan way to reform the state’s tax system.

“I am very pleased that the governor has presented this opportunity for us to work with him on a major structural change,” said Rotundo, House chairwoman of the Legislature’s budget-writing Appropriations Committee.

LePage’s budget proposal would dramatically reform Maine tax law.

Rotundo said there is little doubt that she and her fellow Democrats, as well as many Republicans, have “concerns” about LePage’s proposal to reduce the income tax by increasing and broadening the state’s sales tax. Lawmakers also will have to wrestle with the prospect of ending a long-standing program of the state sharing its tax revenues with cities and towns.

Rotundo said there was little doubt an elimination of revenue sharing would result in local property tax increases. She said some specific proposals that would dramatically cut funding for programs that help senior citizens cover the cost of prescription medicines were concerning.

“I’m also concerned about the fact that as the tax-reform package is now proposed, it is not paid for in the out years,” Rotundo said, “which would mean there will be fewer dollars to go back to our communities for public education and other things that people in our community need.”

She said LePage’s proposal to offset the elimination of revenue sharing with a change in law that would require cities and towns to apply a 50 percent property tax rate to nonprofits that have at least $500,000 in property value was a concern for rural towns that have no nonprofits.

“It doesn’t seem like a workable plan,” Rotundo said. She said no specific alternatives to LePage’s plan have been designed because lawmakers were still doing some deep analysis of what the changes LePage is proposing would mean.

“Once we have a better handle on how it would impact people’s lives and who actually benefits from these proposals, we can start our negotiations,” Rotundo said. “But there are concerns.”

State Rep. John Martin, D-Eagle Lake, a lawmaker who once served as speaker of the House and has decades of State House service under his belt, said he thought LePage’s tone was on target and clear.

“It was one of the better ones I’ve heard,” Martin said. “It wasn’t overly partisan and he wants to eliminate the income tax. Frankly, there are a lot of taxes I would rather not have but we still have to fulfill the role of government.”

Martin said LePage was offering a good jumping-off point and was doing so in a diplomatic manner, so far.

“It is a good beginning and he indicated that he realized that we have to work together in order to do a lot of the stuff he is suggesting,” Martin said. “I think there is no reason why we can’t work together, which means both parties will have to compromise some of their positions in order to achieve that.”

Martin wouldn’t identify any “nonstarters” for Democrats saying, “I’ve been around long enough to know you never say that because you never know what else can be made to work.”

Republicans were more enthusiastic about their governor’s proposal but also acknowledged it created almost as many questions as it answered.

State Rep. Jeff Timberlake, R-Turner, said LePage was passionate in his beliefs and that he “truly believes that what he is doing is the right thing.”

But Timberlake said the proposal to cut revenue-sharing completely would be a problem for rural lawmakers “because small-town Maine really thinks they need it and cities think they need it.” That proposal of the many in LePage’s budget creates pressure on lawmakers from those areas to not go along with the cut.

Timberlake said LePage’s proposal does give cities an avenue to make up for the loss, but for towns without nonprofits, it creates a budgetary problem.

“Most cities have plenty of nonprofits, but small-town Maine doesn’t have many nonprofits,” Timberlake said. He said LePage believes the income tax relief he is offering will make up for any loss in revenue sharing at the local level.

Timberlake said larger nonprofits, including the hospitals in Lewiston and Bates College, were probably going to resist having to pay property taxes.

“Probably, if you could do everything the way it was proposed today, it would save taxpayers money, but by the time it goes through all the special-interest groups — is it going to save taxpayers money?” Timberlake asked.

State Rep. Ellie Espling, R-New Gloucester, the House assistant majority leader, said LePage was doing a governor’s job.

“When you are governor, your job is to be very visionary and bold, I think, and kind of lay out a complete picture,” Espling said. “But you understand, and I think he understands, you have a large Legislature that you have to get it through.”

She said LePage seemed to understand that all of those lawmakers have different interests, goals and opinions. “I think he’s learned to appreciate that,” Espling said.

State Sen. Garrett Mason, R-Lisbon, the Senate majority leader, said he was inspired by LePage’s message.

“Gov. LePage doubled down on his promise to Maine people tonight,” Mason said. “Paul LePage is a man who will fight every day for Maine people.”

During his speech, LePage said his only special-interest group was Maine people.

Mason said any kind of major tax or spending changes that move before the Legislature take time to debate. 

“I think the governor laid out some really positive things here, including the elimination of the estate tax,” Mason said. “When you look all around this state and especially in Androscoggin County, you have a lot of people who are land rich and are cash poor. They want to be able to pass on their property to the next generation and what the governor has proposed is a really positive thing.”

Mason also said LePage’s proposal to double the homestead exemption from $10,000 to $20,000 for those over 65 would help elderly residents keep their homes longer.

“One of the things I like most about the governor is he has kind of the same pledge that I do, and that is to make Augusta as inconsequential in everyday Mainers’ lives as he possibly can — and that’s what he promised tonight,” Mason said.

He acknowledged that LePage’s address and his budget proposal were just the starting line of a “five-month marathon” for lawmakers as they deliberate the governor’s budget proposal.

sthistle@sunjournal.com

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