Politics

October 25, 2013

Two sides of LePage: He sometimes offends, but his focus is unwavering

By JOHN CHRISTIE
Maine Center for Public Interest Reporting

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Gov. Paul LePage has emerged as an anti-politician with his disdain for the sometime necessary tact required of political leaders.

Maine Center for Public Interest Reporting

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What did it do to Mainers’ taxes? Here are some projections for 2014 from the Maine Revenue Service:

* The biggest change in taxes on a percentage basis goes to the working poor – a reduction in their income taxes of 83.6 percent. That group is counted as 19,503 “tax families.”

* The biggest change in taxes on a dollar basis goes to the tax families making $325,974 and above. Their taxes will down $3,021 per family. There are 6,643 families in this group.

* A broader view comes by looking at the middle – those making from about $33,000 to roughly $87,000, about 40 percent of all taxpayers. Their taxes go down about 8.6 percent. On an annual basis, this group’s average savings is about $220.

Interpretations of the new tax have been a projective test of where you stand on the ideological spectrum. Those that call it a giveaway to the wealthy tend to be left-leaning Democrats and progressives. The ones who see it as overdue include the business establishment and the long-frustrated fiscal conservatives, mostly Republicans.

“Fiscally irresponsible … that primarily benefits Maine’s wealthiest taxpayers,” claimed a white paper from the Maine Center for Economic Policy.

From the Maine Wire, the “news service” of the conservative Maine Heritage Policy Center:  “These tax cuts benefit all Mainers by putting more money in the pockets of hardworking people and stimulating economic activity, which in turn creates jobs.” 

Caron, one of the most cited centrists in the state, points out that the Brookings report found that the state’s high income tax was a major impediment to growth.

The LePage tax cut, he said, was “an important goal,” but he questions the way it was done because there was no way to pay for the $230 million cost of the first two years of the tax cut.

Instead, he said, LePage’s next budget made up for that loss with cuts in the money the state would give back to cities and towns – known as revenue sharing. Even though the Legislature restored some of those cuts, the reduction is translating into higher tax rates in some cities and towns, although it is too early in the tax cycle to have precise data.

LePage has mixed feelings when he reflects on the tax cut.

On the one hand, he boasts that 70,000 people no longer pay taxes and that 450,000 of 630,000 Mainers got a tax reduction. On the other, he said, “We were better off not lowering at all compared to what we’re doing now.”

The “now” is the budget the Legislature approved -- over his veto -- that temporarily raises the sales tax rate and taxes on meals and lodging.

One reason legislators increased taxes was to make up for the millions they added back to revenue sharing. Opponents to the LePage-sized cuts predicted those cuts would cause local taxes to rise. If that happened – and it has in some communities – it could hurt legislators’ chances for reelection in 2014.

LePage doesn’t buy the argument that cities and towns had to raise taxes to make up for the loss in revenue sharing. Instead, he said they should do what he did with some success as mayor of Waterville – consolidate.

“Take a look at Lewiston,” he said. “Thirty-six thousand people. They have one town manager, one police chief, one fire chief, one public works director, one superintendent (of schools), one tax assessor. Then you go back to Waterville, Winslow, Fairfield and Oakland,” he said, slapping his hand on the dining room table with the name of each town. “Four communities and they have roughly 36,000, maybe 37,000, people and they have 24 administrators. Lewiston has six – that’s the problem with revenue sharing.”

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