December 5, 2013

Washington County residents have mixed reactions to plan to eliminate taxes

Maine's poorest county has struggled for years, and some wonder whether the FreeME proposal from the Maine Heritage Policy Center is the answer to overcoming poverty and boosting population.

By Colin Woodard cwoodard@pressherald.com
Staff Writer

(Continued from page 1)

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Former Florida Gov. Jeb Bush speaks at the American Legislative Exchange Council's 40th annual meeting. The Associated Press

 

This story is part of a reporting partnership between the Portland Press Herald, The Guardian - a global news organization based in London and New York - and the Texas Observer. The documents obtained by The Guardian contain 40 funding proposals from 34 states, providing a blueprint for a conservative agenda for 2014 that could have significant impact throughout the U.S. The Maine Heritage Policy Center's proposal to eliminate income and sales taxes in Washington County is among them.

Read The Guardian's coverage 

Read the Texas Observer's coverage 

Read documents for all 40 proposals.

Read the Maine proposal.

 



The ALEC Connection

The American Legislative Exchange Council, an influential lobbying network of Republican politicians and big businesses, plans to penalize homeowners who install their own solar panels. It's part of a plan to block state governments from promoting the expansion of wind and solar power. Read the story.

 

The "Prodigal Son Project" is a plan by ALEC to lure back 40 lapsed corporate members who fled the organization after criticism of its policy on gun laws. The group shapes and promotes conservative legislation at the state level across the U.S. Read the story.

 

Beacon Hill Institute 

Boston's Suffolk University, host of free-market researcher Beacon Hill Institute, says the institute's grant application doesn't follow the rules or match the school's mission. Read the story.

In the face of such liberal efforts, the group wrote, “FreeME will allow MHPC to go from defense to offense.”

“Washington County has so much going for it that I think there is no reason outside of policy that it shouldn’t be booming,” says J. Scott Moody, the Maine Heritage Policy Center’s CEO. “Maine’s high tax burden is a big part of the reason why it is among the poorest counties. If we can correct that where it’s worst, that will help economic development in the entire state.”

Washington County was chosen because it ranked worst among Maine’s 16 counties under a series of economic metrics developed by the policy center. Once the county rises above its nearest competitor – now Aroostook County in northernmost Maine – the program would be expanded to the new last-place county.

That would continue, theoretically, until all of Maine had been treated, which supporters acknowledge would likely take decades. Counties that maintained the statewide average economic performance under the metrics for three years running would graduate from the program, although Moody hopes something resembling New Hampshire’s tax system would then be imposed.

“We won’t need the old system because the economy will be larger and there will be less need for governmental welfare,” Moody says.

Initially, with only Washington County in the program, he estimates that lost revenues would amount to $35 million a year – out of $2.3 billion in such taxes collected statewide – and suggests that could be paid for with budget cuts.

HOPING DEMOCRATS GET ON BOARD

For the proposal to be implemented, the Legislature would have to pass a law, and that’s an uncertain prospect with Democrats in the majority.

“When all you have is a hammer, everything is a nail, and unfortunately this governor and the Maine Heritage Policy Center only have a hammer in their economic toolbox,” says House Majority Leader Seth Berry, D-Bowdoinham, who co-chairs the Legislature’s Workforce and Economic Future Committee. “The hammer is, ‘If we put a new loophole in our tax code, our problems will be solved.’ But the data doesn’t bear out that point.”

State Sen. David Burns, R-Whiting, who represents all of Washington County, says he hopes to introduce a bill and win over his Democratic colleagues.

“Washington County has been making some significant strides, but it’s been a tough time for everybody,” he says. “I think this will help spread businesses into the county that will create jobs and improve the economy. It will increase the interest of business here, something we haven’t seen in 40 or 50 years.”

The governor’s office and the state Department of Economic and Community Development did not respond to requests for interviews. The administration has previously indicated that it supports the proposal, and might submit legislation.

RESIDENTS NOT ENTHUSED ABOUT PROPOSAL 

The response to the initiative has been mixed here in Washington County, where many say the economy is starting to rebuild because of a grass-roots, up-from-our-bootstraps effort by local business people and officials. But all acknowledge there is a substantial hole.

Eastport has lost three-quarters of its inhabitants over the past century, but many here think it has started a renaissance. Colin Woodard/Staff Writer

Over the past century, the county has lost a quarter of its population (now 32,000) while the nation’s has nearly quadrupled. It has Maine’s highest rates of unemployment (8.4 percent) and poverty (20.4 percent). 

Many of the county’s residents cobble together a living off the land, cutting wood, raking blueberries, gathering balsam tips for wreath-makers, digging clams or picking the area’s oversized periwinkles off the shore as the seasons and markets allow. 

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