Maine will have $864 million less in revenue to pay for vital commitments such as education and health care over the next two years than it would have had before Governor Paul LePage gave away income tax rewards tilted towards the wealthy. Meanwhile, half of the state’s projected loss in revenue has been redistributed to the top one-fifth of Maine households.

And compensating for shrinking state budgets, all Mainers — including low- and middle-income households — have had to shoulder more of the burden to fund schools and infrastructure, collectively paying an average of $30 million more per year in local property taxes from 2011 to 2016 than in the previous six-year period.

These findings come from a new report by the Maine Center for Economic Policy (MECEP), which was distributed this week to 397 state legislative candidates and all four candidates for governor. It calls on lawmakers to undo LePage’s tax cuts favoring the wealthy. The revenue shortfalls resulting from the tax cuts, according to the report, have created disparities that are “especially difficult for poorer communities and those with small tax bases, because they have no ways to make up the difference.”

The report recommends that the next legislature rebalance Maine’s tax code to re-secure the $864 millions in lost revenue so that it can appropriate the $643.5 million necessary to fully fund the state’s core obligations to expand Medicaid, fund 55 percent of K-12 education, and share 5 percent of its revenue with municipalities to maintain infrastructure.

While LePage’s boasts of a budget surplus of $175.8 million for fiscal year 2018, and a record $272.9 million in the state’s rainy day fund, on top of setting aside $19 million for yet another round of income tax cuts, since taking office, LePage has worked towards shrinking the state budget, and succeeded in kicking about 28,500 working parents off of MaineCare in 2012, and nearly 60 percent of low-income Mainers off of Temporary Assistance for Needy Families programs in the years since.

From 2011 to 2015, after LePage’s tax cuts were in place, the number of Maine children living in “deep” poverty — meaning their families made less than half of the federal poverty line — increased at a rate that was eight times greater than that of the rest of the nation.

“We don’t necessarily have a spending problem — we have a problem with how we’ve made decisions with revenue,” MECEP policy analyst Sarah Austin told reporters about this year’s budget surplus. She explained that these core commitments to health care, education and infrastructure could not be met even if state lawmakers agreed to tap into that surplus — which they have not.

“Even if [the surplus] were enough to cover it … that’s still leaving the state in a tight position to fund other needs,” said Mario Moretto, communications director of MECEP. “When we talk about spending versus revenue, what we need to get out of is this situation where the legislature every two years is trying to figure out how to do more with less, or more with the same, because the state’s needs aren’t static.”

EXPANDING MEDICAID TO 70,000 MAINERS

Medicaid expansion was passed by 59 percent of the voters on the 2017 ballot and the estimated 70,000 newly-eligible, low-income Mainers who fall within 128 percent of the federal poverty line are still being blocked from accessing MaineCare by the governor’s office and receiving the critical health care they are entitled to by law, which took effect in July.

MECEP is recommending the next legislature, under a new governor, appropriate $110.5 million to fully fund the expansion, which, according to the report, would save the state $43 million during the next budget cycle.

With the state funding its share of Medicaid expansion, it would unlock $930 million from the federal government over the next two years to go towards the state’s MaineCare costs. As a bonus, the expansion will create 5,980 jobs and $685 million in economic activity, according to MECEP’s analysis.

ADHERING TO THE WILL OF THE VOTERS AND FULLY FUNDING K-12 EDUCATION

Despite twice being mandated by Maine voters by referendum, the state is still failing to honor the statute requiring it fund 55 percent of K-12 public education costs, leaving towns and cities to pick up the tab. As a result, many communities have scaled back school funding, or raised local property taxes. And the problem, MECEP notes, is much more exasperated in small communities with small property-tax bases, resulting in inequity in education in rural areas.

“Lower- and moderate-income families and seniors on fixed incomes have been forced to absorb rising property tax bills, making it harder for them to cover other basic expenses,” the report reads. “And the services those families rely upon have been cut despite the higher property taxes.”

MECEP is recommending state lawmakers appropriate $320 million to fully fund public schools at the 55-percent rate.

According to the report, the top 1 percent of Maine households received a $16,000 annual tax cut when the voter-approved 3-percent surcharge to fund education was repealed in 2017.

SHARING A LARGER PERCENTAGE OF THE STATE’S REVENUE WITH MUNICIPALITIES FOR INFRASTRUCTURE

The state is bound by statute to share 5 percent of its revenues from sales and income taxes with municipalities to help offset the costs of local infrastructure. But the LePage administration has compelled municipal governments to accept only 2 percent of state revenue, which is another factor putting upward pressure on property taxes, as town officials must find other ways to fund their essential infrastructure and service needs.

MECEP is recommending that $213 million be appropriated to tip the burden back towards the state, allowing municipalities to more effectively provide local services such as fire departments and snow removal, while maintaining parks, libraries and all city properties, while relying less on property taxes to do so.

UNDOING TAX HAVENS FOR THE WEALTHY, WHILE KEEPING RELIEF TO LOW- AND MIDDLE-INCOME FAMILIES

To rebalance Maine tax code away from one which disproportionately benefits the wealthiest households, MECEP is recommending that the 397 candidates running for seats in the state legislature and the incoming governor repeal costly income tax breaks for those with the ability to pay more, as well as reinstate the full estate tax which currently allows extremely wealthy people to pass on money up to $11 million before inheritors pays any tax on the transfer.

MECEP also recommends completely doing away with large business tax carveouts — such as the Maine Capital Investment credit which over the next two years will divert $50 million in potential revenue to Maine’s largest businesses. According to their analysis, no evidence suggests these tax concessions have spurred job creation, raised wages, or driven new investment.

However, MECEP recommends keeping and expanding the Earned Income Tax Credit and the Property Tax Fairness Credit which provide tax relief to the low- and middle-class earners whose wages have not risen as a result of top-end tax cuts, and are in need of more take-home income.

The preceding originally appeared on mainebeacon.com, a website and podcast created by progressive group the Maine People’s Alliance.

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