Maine Democrats should learn a lesson from the 2011 budget deal

Maine Democrats should learn a lesson from the 2011 budget deal

Yesterday, Senate Republicans and House Democrats agreed to create a conference committee to reconcile the different budgets passed by their respective chambers. This is a high stakes moment. If they can’t reach a deal by the end of the week, it may be too late to avert a shutdown. At issue is—yet again—tax breaks for the wealthy. Democrats have been here before, in 2011, and it’s crucial they apply the lessons learned: only agree to a principled deal, particularly one that does not pit Mainers against each other.

In 2011, Maine faced a significant budget shortfall, but remarkably, even in that fiscal environment, Democrats agreed to a massive tax break that disproportionately benefited the wealthy, as well as major cuts to the pensions of teachers and other public sector workers to pay for it. Ostensibly, this deal was supposed to have prevented Health and Human Services cuts. Yet, less than six months after reaching this agreement, a (likely manufactured) shortfall within DHHS prompted Commissioner Mary Mayhew and Governor Paul LePage to go back on the agreement, pushing for a supplemental budget in 2012 that caused fifty thousand Mainers to lose their health care. (Which, by the way, is one more reason why we need to pass Medicaid expansion by ballot this November.)

In other words, in the end, Democrats were divided and accepted a deal that violated progressive principles. The needs of educators and other civil servants were pitted against the needs of other working class families who couldn’t afford private health insurance, all to give the wealthy tax breaks. We can’t let this happen again.

This year, there are reasons for optimism. Take, for example, the extraordinary solidarity demonstrated by the state workers’ union, MSEA-SEIU Local 1989, when it emailed its members yesterday, members who would directly suffer if the state shut down, urging them to call legislators to support “the voter-approved surcharge dedicated to public education.” At Maine People’s Alliance, although we are greatly concerned about the HHS programs in the budget, we also are completely in agreement with our allies and fully support the Question 2 surcharge on the top 2%. We will not be divided.

The core positions of both Republicans and Democrats should be reconcilable in a way that reflects the principled, reasonable positions of both parties. Unlike in 2011 when the state faced a budget shortfall, Maine actually has a budget surplus. There’s enough to ensure education and health care both receive adequate funding, and still have enough money left over to lower taxes a bit. (There’s already bipartisan agreement between the Senate Republicans and Democrats of both chambers to fully fund education, and not go forward with the worst of the healthcare and anti-immigrant cuts.)

The LePage budget itself concedes the main point Democrats (and voters) have been making: households with income over $200k should pay more in taxes. While LePage would then lower income tax rates underneath the surcharge to the advantage of the wealthy, it’s completely possible to structure a tax break that lowers rates more equitably. House Republicans should acknowledge that the LePage budget itself acknowledges the value of households over $200k paying more in taxes and Senate Republicans should stop directly attacking the surcharge and get more creative in their tax lowering policies. Democrats should be helpful negotiating partners and think about what combinations of changes to the standard deduction, itemized deduction cap, sales tax fairness credit, earned income tax credit, and the slew of taxes Republicans already support (meals and lodging, etc.) could be used to move income tax rates in a way that benefit more people and still raise the revenue necessary to fund priorities.

In other words, through a real conversation about policies and values, lawmakers of both parties should be able to avoid a state shutdown by structuring a tax break that does not violate progressive (and voter-approved) values of fairness, or conservative desires for lower taxes. Republicans just need to let go of the idea that the only way to lower taxes is eliminating the surcharge. Everyone knows that there are plenty of levers to pull in the tax code to find common ground—particularly in ways that benefit more people than the most wealthy.

The last thing Democrats (or even reasonable Republicans) should do is accept a compromise that violates their principles, betrays the clear will of the voters and pits Mainers against each other. Democracy only works when people find ways to reach agreements that represent the principled positions of both parties.

With a surplus, a clear mandate from the voters and overwhelming support for tax fairness, Democrats have the high ground here. Please urge your legislator in Augusta to stand strong and not concede more tax breaks that accrue almost exclusively to the wealthy. We’ve been down that road in 2011 and several times since. Lets instead take the road no legislature in Maine has yet taken: fully funding public education (and our other needs) by making our tax code more fair.

Contact your representative here.

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Ben Chin
Ben Chin 8 posts

Ben Chin is the political engagement director for the Maine People's Alliance.

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