Leaked email: Gov. LePage plans more tax cuts for the wealthy

Leaked email: Gov. LePage plans more tax cuts for the wealthy

An internal memo leaked from a member of Governor LePage’s administration to the Portland Press Herald reveals LePage’s plans for the upcoming legislative session and the 2018-19 biennial budget. For his final two-year proposal, the governor plans to pursue the same priorities that Mainers and legislators have rejected over and over again – tax breaks for the wealthy, funded by reductions in education, health care, and other services which Maine communities need to thrive.

The headline from the leaked budget memo is the governor’s plan to fire hundreds of state employees and reduce the top income tax rate from 7.15% to 5.75%. Reducing staffing ultimately means cutting state services that make Maine strong – from issuing hunting licenses to overseeing workers compensation claims, securing our prisons, inspecting bridge safety, and testing our water for poisons.

When Maine’s population was growing, the state invested in these services that improve our quality of life and make Maine an attractive place to live and work.  Now, with population leveling off, such investments are more important than ever to retain and attract workers needed to keep our economy growing. With state government at its smallest size in 20 years, further cuts will only mean fewer front line services to Mainers, especially those in need.

State employees 7-28-2016

Source: Bureau of Labor Statistics, State and Area Employment, Hours and Earnings, 1990-2016.  Figures include all state employees, including those employed by quasi-independent agencies, such as the University of Maine and Community College System, as well as National Guardsmen.

Cutting taxes for the wealthy has even greater ramifications than a reduction in the state workforce.  As the memo from the governor’s office reveals, the LePage administration plans to reduce state spending in other areas, to pay for these tax breaks.  That’s no surprise, since a tax break of this size would likely cost hundreds of millions of dollars, paid for by the rest of Maine’s taxpayers; middle-class families who wouldn’t benefit from the reduction in the top rate of tax but will pay more in other taxes. The governor will likely pay for these giveaways for the top earners by reducing revenue sharing with towns(leading to increased property taxes), continuing to defy the voter-approved mandate for the state to pay 55 percent of the cost for K-12 education, cutting off food assistance to the hungry, and reducing access to healthcare. Just this year, the executive branch has short-changed schools, mental health workers, and prison staff, while pushing for tax breaks for big businesses, and the wealthiest 60 families each year (by eliminating the state’s estate tax).

There’s little evidence to show that reducing Maine’s top income tax rate would do anything to help Maine’s economy, while the cumulative effects of reduced state spending on necessary services and for investments in education, infrastructure, and other growth stimulators have disastrous consequences for Maine’s poor and middle income families, while yielding an economy that continues to be lousy. This week’s leaked memo shows that Governor LePage has no new solutions for Maine or its citizens and that, come January, the legislature can expect more of the same failed proposals in his final budget; proposals that benefit the few at the expense of Maine communities, Maine livelihoods, and Maine’s future prosperity.

About author

James Myall
James Myall 20 posts

James is a policy analyst for the Maine Center for Economic Policy. He holds a master’s degree in ancient history and archaeology from the University of St. Andrews in Scotland and is a candidate for a master’s degree in public policy and management from the University of Southern Maine (USM). He has previously served as coordinator of the Franco-American Collection and an adjunct professor of American history and government at USM, Lewiston-Auburn College.

Comments

You might also like

state budget

Gov. LePage’s policies plunged rural Maine into a prolonged recession

New data released by the US Bureau of Economic Analysis provide more evidence of Maine’s lackluster economy, and the failure of policies pursued by Governor LePage and his allies. In the

federal

Payday loan industry bill threatens vulnerable Mainers

The Maine Center for Economic Policy has joined hundreds of civil rights, consumer, labor, faith, veterans, seniors, and community organizations across the nation to strongly urge its Congressional Delegation to

municipal

As immigration has increased in Maine cities, so has income

The Pew Research Center recently released a report, America’s Shrinking Middle Class, examining the relative proportion of lower-, middle-, and upper-income populations in 229 of the nation’s metro areas.[1] Their findings