AUGUSTA – As the Legislature began its hearings on Gov. Paul LePage’s proposed budget for the coming biennium, Mainers heard a lot about the need for “shared sacrifice.”

But upon close examination, the proposed budget demands much from working families, seniors, retired teachers and state employees while giving huge tax breaks to Maine’s wealthiest residents.

The Maine Center for Economic Policy believes that there are alternatives, like broad-based property tax relief, that will do more to spur growth and ease the pain for more Maine people.

The governor’s budget cuts property tax relief for working families while providing Maine’s wealthiest 1 percent of households, those earning more than $360,000, a $2,700 tax cut.

It freezes health care funding for thousands of working parents and prescription drug assistance for seniors to save approximately $30 million, while doubling the estate exemption to $2 million, giving away $30 million in tax breaks to about 550 large estates.

The proposed budget undermines retirement security for teachers and state employees to fund over $200 million in tax breaks, half of which would benefit households earning over $120,000.

It asks retired teachers and state workers who draw an average $18,500 pension to sacrifice cost of living increases in order to provide tax breaks for Maine’s wealthiest residents.

This budget also fails to fulfill LePage’s campaign promises. It doesn’t come close to meeting his pledge to boost state education funding to the full 55 percent voters approved in 2005.

In fact, general-purpose aid to education from the General Fund will be lower in 2013 than it was in 2006.

The Legislature’s Office of Fiscal and Program Review projects that funding will fall approximately $137 million short of that legally mandated goal.

LePage calls this a “jobs budget” that will make Maine a better place to do business. Unfortunately, his stated opposition to bond issues will not only undermine jobs but also curtail critical investments in Maine’s roads and bridges, schools, technology infrastructure and communities.

Cutting these investments now will hurt Maine’s immediate and long-term economic prospects more than providing tax breaks to Maine’s wealthiest residents will help.

Finally, this budget shifts costs in ways that will hurt all Mainers.

Funding cuts for municipalities and continued failure to meet the 55 percent threshold for education funding will shift the burden to towns and cities and likely to their property taxpayers.

In fact, this budget forgoes broad-based property tax relief for all in order to provide income tax relief that disproportionately benefits Maine’s wealthiest residents.

It slashes targeted property tax relief for lower and middle-income Mainers while providing income tax breaks at the top end.

The budget’s proposed reductions to health care coverage, higher education and infrastructure will shift costs to businesses and individuals. Over time, this will erode rather than enhance Maine’s economic prospects.

Maine families deserve a state budget that reflects their priorities and their values, that maintains public investments in our people and communities during good times and bad and that promotes shared prosperity by guaranteeing sustainable and predictable revenues raised from a sense of mutual responsibility by all taxpayers.

Changing the income levels at which the top state income tax rate kicks in, expanding and making refundable the state earned-income tax credit and more robust and streamlined property tax relief are options that offer more to more Maine families and more to boost our economic recovery.

Only then will we have a budget and tax system that benefits the majority of Mainers, provides a predictable revenue stream for critical public investments, and positions us for economic success. 

– Special to the Press Herald