Regardless of one’s views on state-financed home care for the elderly and disabled, the ballot measure (Question 1) is deeply flawed. Others have identified various issues, so I will focus on tax policy and budgetary matters.

The initiative seeks to create an “earmarked” revenue dedicated to funding home care services, which pushes this program to the forefront of state government priorities.

A general problem with dedicated taxes is the lack of match between revenues and spending needs. Financing relies on increased taxes on capital gains and the earnings of Maine’s highest-income households. With its dependence on collections from the most economically sensitive parts of the income tax base, home care program revenues will fluctuate, at times exceeding and other times falling short of financing requirements.

State policymakers are precluded from reallocating earmarked revenues, even when resources exceed programmatic needs. The ballot measure would tax more heavily to provide free home care to people who can afford to pay for services. During prior recessions, providing promised “safety net” benefits became unfeasible in the face of increased eligibility and dwindling income tax collections.

The much higher top income tax rate and greater reliance on income taxes will reduce untapped revenue capacity and hinder efforts to increase income taxes to finance other priorities or reduce Maine’s use of regressive taxes. Reducing through earmarking the state’s access to a principal tax base will not improve the prospect of avoiding painful cutbacks when the inevitable next recession occurs.

Josie LaPlante

professor, Muskie School of Public Service, University of Southern Maine

Bath resident


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