WISCASSET

A public forum on Gov. Paul Le- Page’s proposed state budget was hosted by Sen. Chris Johnson, D-Somerville, and Rep. Mick Devin, D-Newcastle, on Monday night.

Residents from Lincoln County communities were in attendance as Johnson and Devin discussed the $6.5 billion two-year plan.

After reviewing some budget changes, community members raised concern that the proposed reduction in the income tax from 7.95 percent to 5.75 percent by 2019 and the increase in sales tax from 5 percent to 6.5 percent in 2016 was regressive.

According to Johnson, a special tax fairness credit will be created in order to provide a credit on income taxes that matches the base level of sales tax for Maine residents. He added that this does not reflect property tax.

Through this change, more of the tax burden will fall on residents with middle-class incomes, while people at high income levels end up with a reduction by 2019.

“What all of this ends up achieving is not an increase overall in taxes for people, even though it adjusts how it falls on different income levels. What it ends up doing is reducing it by $300 million — how much revenue is being raised,” Johnson said. “That, however, means you’ve got a $300 million hole in what education, revenue sharing and other programs operate on, and there’s no solution to that in the policies that are part of this budget because it falls out of the two-year budget cycle.”

Johnson also commented on the social divide this change may cause in communities, in addition to the elimination of revenue sharing that will occur in 2017.

“We’ve had the problem as a state, with young families who want a decent education for their kids and poor people who have a hard time affording property taxes being pitted against each other at town meetings,” he said. “So there’s one big divide right there, which this budget does not address. In fact, it makes it worse because it cuts revenue sharing in towns and it actually increases the amount that municipalities have to raise for education, and property taxes as well.”

The proposed budget will increase the amount of education funding by $68 million in 2015-16, while the state contribution has only been raised to $20 million. Municipalities will be tasked with funding the rest — a total of $48 million.

The budget also reflects a cut of $4 million in casino revenue that was dedicated toward establishing pre-K programs. Instead, schools will be allowed to apply for grants to implement or revitalize those programs.

Schools with the highest percentage of free or reduced lunches will have priority in applying for these grants, according to Johnson.

The public was also concerned as to why state funds were not meeting the 55 percent funding obligation toward education, with 46.2 percent of education costs funded in 2015.

According to Johnson, the Legislature and government are not required to implement a 55 percent funding obligation due to the fact that there is no law as to how quickly the 55 percent goal must be implemented. As a result, the goal is being pushed back every year.

Although both Johnson and Devin have proposed plans to achieve that goal, property taxes have played a significant part in the decision.

“If it’s a choice between getting to the 55 percent or keeping property taxes down, I’m going to property taxes first because so many people in my district who are on fixed incomes can’t afford an increase in property taxes,” Devin said. “I would like to see us come up with some fundamental changes to our revenue generation, and increase our revenue so that we can keep our property taxes low and fund education properly.”

Johnson was in agreement, saying that there needs to be an investment in both areas.

“We’ve got a lot of work to do on ensuring that we have education funding for schools to succeed and affordable housing,” he said.

Though Devin expressed displeasure in review of the proposed budget changes, he was still hopeful.

“I don’t agree with it,” he said. “But this budget has opened the door to so many things that I believe, over the next few months, we’re going to be able to talk about fundamental tax reform and hopefully, in the process, we’re going to come out with a much better product.”

Expensive typo

REPUBLICAN LEADERS said Monday that the case of the $36 million-a-year typo in an energy bill isn’t as simple as it seems, because current legislators might not agree with their predecessors who passed the original legislation in 2013. See story, page A3.

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