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

EASTPORT — Water Street, the main drag in the center of America’s easternmost incorporated city, is missing something this year: boarded-up storefronts.

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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.

When they were built in the late 19th century, the brick-and-granite blocks bustled with activity as shoppers came and went from surrounding homes, sardine canneries and the archipelago of Canadian islands just across the bay from what was a town of more than 5,000.

Today, the canneries are gone, the international border is far less permeable and Eastport’s population has fallen by three-quarters. There’s a ghostly feel to the city, which stands on an island beset by fog and 20-foot tides that make the surrounding ocean flow like a river.

But this fall, more shops, galleries and restaurants are staying open, and the rest are closed for the winter, not for good – signs that a long-anticipated renaissance is at hand.

“For 10 years we have been doing what we can where we are with what we have, and we’re really beginning to see the fruits of that effort,” says Linda Godfrey, above, co-founder of The Commons, a gallery exclusively featuring work by the area’s artists and craftsmen. “Throughout Washington County you can see these things happening, the result of our own efforts, energy and capabilities.”

That’s why many hereabouts say they were surprised by a conservative think tank’s proposal to further economic development by turning Maine’s poorest county into a gigantic tax-free zone. While open to considering its merits, many business and political leaders think the proposal is philosophically out of step with local efforts, which have emphasized homegrown revitalization rather than reliance on special breaks for the long-struggling county.

Under the Maine Heritage Policy Center’s “FreeME” initiative, Washington County residents and businesses would cease to pay state income taxes or collect sales taxes until economic conditions reach the statewide average and stay there for three years running. 

The initiative, introduced last summer and now being evaluated by Gov. Paul LePage’s administration, would make America’s easternmost county the first to waive such taxes in a state that has them. It is intended to showcase economic libertarians’ contention that taxes are a central impediment to economic development. 

According to a grant application acquired by The Guardian, a London and New York-based news organization, and passed on to the Portland Press Herald as part of a reporting collaboration, the Maine Heritage Policy Center sees it as “a research and demonstration project” that would “release residents from extreme government dependency” and “spark an economic boom that can be easily transferred to other areas of Maine and serve as an example for all the United States.”


The grant application was drafted in May for submission to the State Policy Network, a national group that funds and coordinates activities between the Maine Heritage Policy Center and 62 similar think tanks across the country. The group intended to seek funding for promising proposals from the Searle Freedom Trust, an important donor to conservative groups such as the American Legislative Exchange Council, Americans for Prosperity and the State Policy Network itself, according to The Guardian.

The Maine Heritage Policy Center requested $35,000 to underwrite most of the cost of the project, which originally included an effort to adopt anti-union “right to work” laws in Washington County. It is not clear if funding was approved, although the policy center launched its FreeME website and associated research study late last summer, as promised in the grant proposal’s timeline.

In the application, the group said it was acting in part to counter the “Fair Share Now” initiative, a proposal by a coalition of progressive and labor groups during this year’s state budget process that sought to shift more of the tax burden onto the wealthy. 

(Continued on page 2)

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