Throughout the last two weeks, the go-to adjective for describing Gov. Le-Page’s budget has been “bold.” For politicians unpacking the complicated policy document, the word became synonymous with “we don’t know what to say about it.”

Fair enough. The intricacies and impacts of the budget won’t become fully apparent for weeks, if not months, as legislators and interest groups conduct their own exhaustive analyses.

But while the budget is bold in some ways, it’s notably restrained in others.

Politically, the boldest component is the governor’s surprise embrace of an increased and expanded sales tax. After recently self-assessing as “the most conservative governor in the nation,” LePage seems an unlikely champion for a tax increase of any kind, even coupled with income tax cuts.

Notably, the governor never campaigned on expanding or increasing the sales tax, and the idea is an anathema to the Republicans, who were broadsided by its inclusion. It will require an extraordinary expenditure of LePage’s political capital to make the idea palatable to Republican lawmakers.

Interestingly, the policy itself is not new. It harkens back to the 2009 tax reform legislation championed by then-Democratic Majority Leader John Piotti, and signed into law by Gov. Baldacci. That reform was subsequently defeated at the ballot box by a Republican-led coalition pillorying the sales tax expansion. Remarkably, Piotti’s plan didn’t even include a sales tax rate increase, only an expansion of its application.

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The policy also resembles the “Gang of 11” tax reform proposal championed in the last Legislature by then-independent state Sen. Dick Woodbury of Yarmouth. That plan, a victim of special interest opposition from all corners, never got traction.

By making the sales tax increase and expansion the enabling mechanism for his income tax cuts – and by recycling a soundly rejected Democratic tax reform proposal in the process – the governor is indeed taking a bold, even jarring political step.

It’s this willingness to rattle cages and offend entrenched interests, including his own political allies, which accounts for much of the governor’s enduring political appeal.

It’s also why he is perhaps the Maine politician most uniquely suited to advance a real debate on taxation and spending. Whether he can ultimately deliver, of course, is an open question.

Regardless, this budget demonstrates the governor’s surprising decision to govern rather than demagogue.

He could’ve issued an unabashedly ideological and political budget akin to the one put forward by Gov. Sam Brownback in Kansas. But he didn’t. Instead, this is a policy document with checks and balances. It espouses political ends, but it puts forward challenging policy ideas to achieve them. Various elements offend both the left and the right.

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For some, that’s the precise reason this budget isn’t bold enough. They contend the governor’s proposal is acceptable as a final compromise budget, but that its restraint necessarily invites a watered-down two-thirds budget that will ultimately fail to dramatically change how Mainers pay for their state government or substantively address Maine’s fiscal challenges.

Perhaps they’re right. But after spending years and gallons of ink calling upon this governor to exercise restraint and compromise, I certainly will not criticize him for embracing a measure of incrementalism.

That’s not to suggest I agree with everything in the budget. I don’t. The elimination of revenue-sharing, for example, is a fiscal shell game allowing the governor to claim he’s giving taxpayers a cut, but then forcing them to absorb either reduced local services or higher property taxes or both.

Revenue-sharing’s elimination will also hit rural residents and communities – ironically, the governor’s strongest base of political support – especially hard, since they lack large hospitals, private colleges or other major nonprofit institutions that would be newly taxable as a mitigating measure under the governor’s proposal.

What’s more, the elimination of the home mortgage deduction, itemized deductions and the homestead deduction for those under age 65 all raise questions about the impacts of this budget on working class Mainers. Those concerns cannot be dismissed out of hand.

Regardless, the governor deserves credit for initiating a rational, pragmatic dialogue about exporting more of Maine’s tax base; decreasing volatility in state revenue; reducing personal and business income taxes, and changing state government’s relationship with our fiercely independent local municipalities.

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LePage is not the first governor to start this conversation, of course, and his remedies aren’t especially novel. Even so, he may be in the best position to deliver results.

Michael Cuzzi is a former campaign aide to President Obama, Secretary of State John Kerry and former U.S. Rep. Tom Allen. He manages the Boston and Portland offices of VOX Global, a strategic communications and public affairs firm headquartered in Washington. He can be contacted at:

mjcuzzi@gmail.com

Twitter: @CuzziMJ


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