March 14, 2013

LePage budget called a bad deal

Municipal and business officials crowd a hearing to protest the 'tax shift' they believe it will bring.

By Steve Mistler
State House Bureau

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In this December 2008 file photo, the National Semiconductor's facility in South Portland. National Semiconductor was one of several businesses to testify Wednesday, March 13, 2013 against Gov. LePage's proposal to eliminate the Business Equipment Tax Reimbursement program.

John Ewing / Staff Photographer

Related Documents

PDF: Companies that used equipment tax reimbursement in FY-2012

The equipment reimbursement measure would also cost Maine municipalities an estimated $10 million, according to budget documents.

The proposal is paired with the municipal revenue sharing suspension and repealing the homestead and circuit breaker programs for homeowners. The homestead exemption applies to individuals who have owned a home for a minimum of a year and exempts from taxation the first $10,000 of property value.

The circuit breaker program pays a $1,600 refund to low-income homeowners and renters.

The Maine Municipal Association has actively opposed the governor's budget since it was released in early January, saying the combined effect is a $420 million tax shift to towns and cities.

The plan has not been warmly embraced by Republicans or Democrats. However, some Republicans have suggested that towns need to do more to share or consolidate services with their neighbors.

The idea was soundly rejected on Wednesday. Kathy Littlefield, a Waldo selectwoman and member of the Waldo County Municipal Association, said the combined effect of the governor's proposals would result in a $5.8 million tax increase to Waldo County towns. Littlefield described consolidation talk as "rubbish." To the "belt-tightening" argument, she said, "We have tightened our belts so much there is no belt left, we are right up against the buckle."

Sanford Mayor Maura Herlihy said she is a registered Republican who stands to benefit from the income tax cut that the governor's budget is designed to protect. She said she'd gladly give it up to avoid a "tax shift."

Steve Mistler can be contacted at 620-7016 or at:

On Twitter: @stevemistler

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