AUGUSTA — Eliminating any of Maine’s tax exemptions and credits will be politically challenging but may be necessary to avoid further cuts to municipal revenue sharing, lawmakers said Monday.
A group of lawmakers, state officials and economists that has been formed to examine the state’s tax breaks, exemptions and credits to come up with $40 million in savings in the state budget met Monday for the first time.
Republican Sen. Roger Katz of Augusta said that repealing any tax exemptions won’t be easy because people, businesses and organizations at one point made the case for why they are necessary.
But if the group can’t come up with the savings, it will mean an automatic reduction to municipal revenue sharing, which has already been reduced by $75 million, a cut that has been harshly criticized by cities and towns.
“I think most of us agree (that) would be very damaging to municipal governments, so I think we will be motivated to do it,” Katz said.
The group, which is expected to meet several times this fall before reporting back to the Legislature in December, is also trying to devise a process to regularly review the effectiveness of the various tax exemptions.
Democratic Sen. Anne Haskell of Portland said she’s hopeful that the group will be able to find several exemptions that are outdated or ineffective so their elimination wouldn’t be too damaging to businesses or residents.
“I’m hoping that our committee will find that there are some where we don’t know what the benefit has been, or we are able to say the benefit has not matched what the original intent was,” she said.