Monday January 14, 2013 | 07:27 AM

It was clear from the get-go that Gov. Paul LePage's plan to suspend state aid to municipalities would be among the most controversial proposals in his two-year budget.  

The projected impact on towns and cities is significant. It also gives almost no political cover for Republican and Democratic lawmakers who would have to convince their respective districts that the two-year suspension would not increase property taxes and/or result in cuts to town services like road paving, emergency services and local school funding, just to name a few.

Additionally, the conservative response has been anything but enthusiastic, as evidenced by this thread entitled "shift and shaft" on the forum As Maine Goes.  

Further, the revenue-sharing suspension plan appears to have absolutely zero support among Democratic leaders who control the Legislature. 

So what's the governor's play here? 

It doesn't seem entirely coincidental that what Democrats are calling a $400 million tax shift in the governor's proposal is almost equal to the price tag of the tax cuts the Legislature passed two years ago. Remember, Republicans and Democrats passed the tax cuts, which contrary to some of last year's election rhetoric, don't just benefit wealthy Mainers. 

Maybe the governor really believes the municipal revenue sharing proposal is the right way to balance the budget. Or maybe the proposal is essentially LePage's challenge to Democrats: Go ahead, you balance the budget.

There are only a few ways Democrats can do that. Such measures include more cuts in state government and services, or to suspend or repeal the tax cuts that Democrats helped pass two years ago.

Progressives are calling on lawmakers to do the latter. But politically, it's no easy feat.

Even if Democrats can get enough Republicans to support repealing the tax cuts and render LePage's veto pen useless, such a proposal makes their majority vulnerable in 2014 because it arms Republicans with a ready-made talking point: "As soon as Democrats regained power, they raised taxes." 

It may not matter if such a claim may not be completely grounded in truth, or that the tax package was frozen before bulk of it went into effect (and thus wouldn't technically be a tax hike).

As recent elections and referendums have shown, nuanced defenses of policy decisions don't always resonate with voters.  

That may be why Democrats have been thus far coy about the tax cuts as a budget solution. 

-- Just a guess, but Part P of LePage's budget must have given the governor some satisfaction. 

It saves over $6 million over two years by repealing an exemption for publications issued at least four times a year. In other words, it repeals a tax exemption for newspapers and magazines. 

 

In justifying the proposal, the administration wrote that Maine is one of only five states with the exemption.

"The only other products manufactured in Maine that are afforded tax exempt status are “necessities of life” (i.e. grocery staples, medicines, prosthetic devices, residential electricity, wood pellets, etc.)," LePage budget brief said. "The product exemption for publications does not rise to the level of being a necessity."

Ouch. 

-- LePage's Office of Policy Management looked like it was going be a powerful agency when the governor proposed it last year. Part F of his budget proves it. 

The budget orders OPM to find $10 million in annual administrative savings in the next fiscal year. In other words, the agency will have to identify extraneous personnel and services to ax in order for the budget to stay balanced. 

OPM has an approximate $400,000 payroll and it originally started with a mandate to find $1 million in annual savings. It recently hired William Schneider, Maine's former attorney general. It also has subpoena power if given permission by a Maine Superior Court.

Richard Rosen, the director of OPM, attended Friday's budget briefing. It would appear that we'll be seeing a lot more of Rosen and his agency over the next two years. 

-- Speaking of Friday's budget briefing, some may be wondering why the press was allowed to attend the administration's meeting with elected officials. Originally, the administration had scheduled a private meeting with legislative leaders, which was to be followed by a second briefing with the press.

The administration invited the Legislature's entire budget-writing committee to the first meeting. That was the problem: With a quorum of committee members present, the first meeting could no longer be private without violating the state's Freedom of Access Act (There's also the issue of whether the committee or the administration provided notice of the committee meeting, but I digress.). 

Long story short, the Sun Journal's Scott Thistle walked into the private meeting and told administration officials that it was violating the law by attempting to shut out the public and the press. After a verbal tussle -- which Thistle recorded here -- the administration allowed the press to come in.

"Great thanks, I appreciate it," Thistle said as he walked into the cabinet room. "Now you guys are abiding by the state law. That's great." 

 

 

 

 

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Steve Mistler covers politics and government for the Portland Press Herald. He spends a lot of time in the hallways of the State House.

Steve can be reached at 791-6345 or smistler@pressherald.com.
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