October 1, 2013

Taxes going up in Maine Tuesday

Sales taxes and meals and lodging taxes edge upward, while newspapers and periodicals are taxed for the first time, to keep the state budget in balance.

By Steve Mistler smistler@pressherald.com
State House Bureau

and Eric Russell erussell@pressherald.com
Staff Writer

(Continued from page 1)

click image to enlarge

Hi-Hat waitress Caitlyn Laflin, right, gives customers change Monday on the eve of increases in meals, lodging and sales taxes in Maine. Meals and lodging taxes will increase from 7 percent to 8 percent and the sales tax will rise to 5.5 percent from 5 percent.

Andy Molloy/Kennebec Journal

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The Maine Press Association, a trade group that includes the Portland Press Herald/Maine Sunday Telegram and 32 other newspapers in Maine, objected to the tax change, but later accepted it in exchange for keeping state public notices in print newspapers, an important revenue stream for the industry.

Lisa DeSisto, publisher of the Press Herald, said all home delivery customers were notified of the new tax in advance. She said she feels for the retailers who are used to collecting $1 for the daily paper and now must ask for an additional 6 cents.

Tax increases are always politically tricky, but both Democrats and Republicans adopted the temporary increases in June while trying to avoid cuts elsewhere.

LePage proposed suspending $200 million in aid to cities and towns, and Democrats wanted to balance the budget by delaying or repealing portions of the $400 million tax cut that lawmakers enacted in 2011. Eventually, the two sides agreed on the temporary tax increases.

“Governor LePage is counting on the people of Maine to have amnesia,” said House Speaker Mark Eves, D-North Berwick. “But no one will forget that he proposed massive property tax hikes and cuts to our schools and safety net to fund tax breaks for the wealthy. The Legislature put the brakes on his plan and rejected Republican threats of a government shutdown and instead made the responsible choice to prevent massive property tax spikes and restore cuts to our schools.”

House Minority Leader Kenneth Fredette supported the budget compromise. He said his Republican caucus opposed the temporary tax hikes, but many members did not want to reject the budget and shut down state government.

“Like any compromise, there were parts I liked and parts I didn’t,” Fredette said. “The tax hikes were certainly something Republicans didn’t like and tried to get Democrats to drop, but I’m sure the tax increases would have been much larger if Democrats had their way.”

LePage, who proposed the tax on periodicals in his state budget, has said that the budget and its corresponding tax increases are owned by the Democratic majority. His office released a statement Tuesday telling Mainers that he opposed the increases.

“Retired mill workers living on fixed incomes, elderly widows collecting Social Security and our veterans, who receive nothing more than their military pension – each of them care very much about this tax increase,” he said. “We are already one of the highest-taxed states in the nation. We have some of the lowest per capita income in the country. Now is not the time to ask Mainers to give more of their income to fund government.”

Steve Mistler can be contacted at 791-6345 or at:

smistler@pressherald.com

Eric Russell can be contacted at 791-6344 or at:

erussell@pressherald.com

Twitter: @PPHEricRussell

 

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