Saturday, March 8, 2014
When it comes to fiscal policy, Kansas Gov. Sam Brownback and Gov. LePage have a lot in common. Both believe that tax reductions on individuals and businesses are the best way to grow an economy, and both have signed legislation to see that policy through. For those efforts, the libertarian Cato Institute gave Brownback and LePage "A" grades last year for their fiscal initiatives. Only four governors received that rating.
In terms of tax policy, LePage has a lot more work to do reach meet Brownback's reduction agenda. According to a recent report by Stateline, over the past two years Kansas has reduced its income three income tax brackets to two, cutting the top rate from 6.45 percent to 4.9 percent and bottom rate from 3.5 percent to 3 percent. The Republican-led Legislature also eliminated income taxes for 200,000 small businesses.
The $400 million tax cut package that LePage enacted in 2011 cut top income-tax rate from 8.5 percent to 7.95 percent and eliminated income taxes for about 70,000 Mainers. It reduced the four old tax brackets (8.5 percent, 7 percent, 4.5 percent, and 2 percent) to three (7.95 percent, 6.5 percent and 0 percent).
As Stateline reported, the tax reduction efforts in Kansas has created a bit of a dilemma for Brownback, who is now considering tax hikes to make up for the state's lost revenue.
The Kansas Legislative Research Department -- the counterpart to the Maine Legislature's Office of Fiscal and Program Review -- estimated that the reductions will yield a series of budget shortfalls totaling $2.5 billion.
In response, Brownback last year proposed making a the state's temporary sales tax increase permanent and to end some tax credits, deductions and exemptions. The Kansas governor worried that without additional revenues the education and the state's Medicaid program would be adversely impacted. The Kansas Legislature rejected those measures and this year Brownback is reviewing alternative ways to increase revenue, including freezing the state's sales tax rate at its current level rather than let it drop as planned.
He has previously promised more tax cuts, including eliminating the state's corporate income tax. He has already submitted legislation that would make a temporary tax cut on the sale of airplanes and parts permanent (OFPR calculated that the aircraft tax cut will cost $608,000 in annual revenues).
LePage will release his budget Friday at 3 p.m.
Chandler Woodcock, the governor's chief of the Department of Inland Fisheries & Wildlife, is currently earning a pension of $24,594 while earning a state salary of $83,732, according to 2011 data from the Maine Public Retirement System. Woodcock is a former educator and state lawmaker.
Meanwhile, the Maine House Republican Office also used the database to discover that a Presque Isle Superintendent made $222,000 in 2011, $87,700 from his retirement.
Search the entire 2011 retirement database here.
Senate President Justin Alfond, D-Portland, posted on Facebook today that he and Democratic leadership will be meeting with the governor and his staff to discuss the budget.
Not sure if this counts as the meeting that Alfond and the Democrats were looking for, or if the only way to satisfy that request is for LePage and the Senate President to share a double-straw Mai Tai and pupu platter.Tweet
Steve Mistler covers politics and government for the Portland Press Herald. He spends a lot of time in the hallways of the State House.