June 21, 2013

LePage seeks new budget deal

He asks conservatives to reject the bipartisan budget and endorse a 60-day temporary spending plan to buy more time.

By Steve Mistler smistler@pressherald.com
Staff Writer

(Continued from page 1)

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Gov. Paul LePage speaks during a rally on Thursday June 20, 2013 in the Hallo of Flags at the State House in Augusta.

Staff photo by Joe Phelan

click image to enlarge

Gov. Paul LePage speaks during a rally on Thursday June 20, 2013 in the Hallo of Flags at the State House in Augusta.

Staff photo by Joe Phelan

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"A government shutdown would be a real failure for all of us," Katz said. "We have a duty and a responsibility to keep the shop open."

The budget passed by the Legislature contains a temporary sales tax increase, from 5 percent to 5.5 percent and a 1 percent increase in the meals-and-lodgings tax, from 7 percent to 8 percent. Both increases would end after the two years. They would fill a $400 million shortfall created by the tax cut package the Legislature passed in 2011.

LePage's budget, proposed in January, was designed to protect the tax cut.

Critics of his plan say LePage's budget proposal contained a $400 million tax increase because of a two-year suspension of municipal aid and changes to other programs that provide property tax relief.

LePage's budget also contained an income tax increase that would have raised the tax bill of the average Mainer by $39 over the next two years. The proposal was noted by the conservative Tax Foundation, which criticized LePage for attempting to "sneak" a tax increase into his budget proposal.

The increase was driven by a change in inflation indexing to what's known as chained consumer price indexing. The subtle but substantive change would have generated more than $8.6 million in income tax collections over the two fiscal years beginning July 1.

The Appropriations Committee rejected the proposal.

During the rally Thursday, several people held up homemade signs, such as "Government Outspent My Family Income" and "What's Not to Like About Lower Taxes."

Marin Cherkis, 76, of Dresden held up a sign that said, "GOP -- The Governor thinks of Maine, not re-election." A huge fan of LePage, Cherkis said she supports his decision to veto the budget."I don't like the taxes going up," she said. "We are taxed to death."

While the governor's budget would have raised income taxes on the average Mainer by $39 over the next two years, that's not really a tax increase because it's intended to keep pace with inflation, said Curtis Ayotte, 33, of Farmingdale. He said the budget compromise passed by the Legislature is much worse.

"It's a bad budget," he said. "It's a disgrace. We're going to have to cut spending and waste and get the fat out of the budget."

Tim Ryan of Freeport, a self-described Reagan Democrat who voted for independent Eliot Cutler two years ago, said he hopes LePage's veto will cause Democrats and LePage to work out a compromise. "I hope they meet in the middle," he said. "Both sides now have to give up a little something."

Mary Adams also lauded the governor, calling him a "tax guerrilla," a term that has been used to describe Adams, who has led several popular referendum campaigns to cap property taxes.

"Governor," she said, "you've got a huge fan club in the ordinary people of Maine who see through the smoke and mirrors of Augusta and urge you to keep on going."

Staff Writer Tom Bell contributed to this report.

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

smistler@pressherald.com

Twitter: @stevemistler

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