Tuesday June 04, 2013 | 10:54 PM

Fascinating discussion by the Legislature's budget-writing committee Tuesday night. For perhaps the first time in public (more on that later), the committee tasked with crafting an alternative to Gov. Paul LePage's proposed two-year budget tackled -- ok circled -- the elephant in the room: Taxes.

First, the big news (sort of).

Sen. Emily Cain, D-Orono, announced that Democrats, who control the Legislature, won't seek a repeal of the tax cuts passed, but still unpaid for, by lawmakers and approved by LePage in 2011. The cuts represent approximately $400 million of the estimated $800 million budget gap over the next two years. LePage's proposed budget is effectively designed to protect the 2011 tax cut with spending cuts, a two-year suspension of municipal aid and at least one subtle tax increase.  

Here's why Cain's announcement was important. Democrats on the Taxation Committee last week reported that it would seek to delay portions of the tax cut package, a position that was presumed to be the position of Democratic leadership.

It's not yet clear if Cain's announcement doubled as a challenge to Republicans, but it sure seemed like it. While some Democratic observers saw it as surrender, it also seemed designed to put the burden on Republicans to find their own budget solution.

It's generally agreed that the revenue sharing cut offers Republicans -- or anyone else -- zero political cover. Towns are nearly unanimous in opposing it. While some cities are ignoring its impact altogether, others are predicting significant cuts to municipal services, road and infrastructure repairs or increased property taxes. 

What happened next was a robust discussion about taxes. Republicans, led by Rep. Kathy Chase, of Wells, held the caucus position. No tax increases, she said. None.

"We're not at a point where our caucus can look at any revenues," Chase said. 

Cain then floated another idea. Raise the sales tax and then roll it back. In the interim, she said, lawmakers could work on a more permanent solution to Maine's evergreen revenue and tax problem. What did she have in mind? The tax reform package proposed by the bipartisan gang of 11

"There are some who say that if we don't do something big we shouldn't do anything at all," said Cain, a co-sponsor of the tax reform proposal. She added that it was unlikely that the plan could work as a budget solution this year. Rep. Dennis Keschl, R-Belgrade, another co-sponsor, agreed. 

Other Democrats argued that Republicans needed to move from their no-revenue position. Rep. Mike Carey, D-Lewiston, noted that the governor's budget has tax increases. Rep. Linda Sanborn, D-Gorham, said it seemed like Democrats were doing all the compromising.

"We need you to come to the middle," she said. 

Sen. Patrick Flood, R-Winthrop, seemed willing. He noted that state revenue projections for 2015 were identical to revenues in 2007. It was remarkable, he said, that lawmakers had been able to produce a balanced budget under those circumstances.

What's all this mean? Tough to say, but it's important to note that most of the budget-writing committee's negotiations are done behind closed doors. Committee members also go to great lengths to keep politics out of their public deliberations (Flood once attempted to resign when the bubble was penetrated in 2011).

For those reasons Tuesday's revenue dance was noteworthy, if not choreographed for public consumption. Republican and Democratic operatives certainly wanted the media to take notice.  

 

Shortly after the committee retreated to its closed-door confines, the House Republican Office announced it will be holding a press conference on Wednesday to discuss the budget, a sign that that public relations game will continue. House Republican spokesman David Sorensen said Wednesday morning that several Republican lawmakers will propose specific spending cuts that are not endorsed by Republican leadership.

But as Sen. Dawn Hill, D-Cape Neddick, noted on Tuesday, time is running out. Hill, the Senate co-chairwoman of the budget committee, said panel had two more days to pass a budget. 

"A (government) shutdown is not an option," she said. 

 

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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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