Maine labor leaders and progressive advocates on Monday urged lawmakers to increase income taxes on wealthier residents and corporations to avoid the cuts proposed in the governor’s budget.
Lawmakers are facing their most difficult budget negotiation in the last decade, as they look for ways to close a structural deficit of $450 million over two years. The Legislature’s budget writing committee began a series of public hearings on the budget Monday.
Gov. Janet Mills proposed closing the gap through a combination of cuts, focused primarily on new or recently expanded programs not yet fully implemented, and targeted tax increases, including raising the cigarette tax by a $1 a pack.
Mark Brunton, the president of the Maine Service Employees Association, which represents most state government employees, urged lawmakers to consider taxing wealthier Mainers and corporations at a higher rate to fund much-needed programs, including stipends for child care workers.
Brunton said record tax revenues since the pandemic, which have started to level off, enabled the state to make meaningful investments in state employee wages, affordable child care and reimbursement rates for direct-care workers.
“Prematurely turning to budget cuts in the face of reduced revenue is short-sighted,” Brunton said. “The proposed cuts will cause further erosion of the state workforce and closures of agencies that deliver vital services to the public. The proper path forward is to raise revenue by shifting the responsibility for funding budget priorities from the working class and middle class to corporations, to wealthy Mainers who reap economic benefits from our economy.”
Senate President Mattie Daughtry, D-Brunswick, said she was open to looking at ways to raise revenue and promote “tax fairness” for working class Mainers, suggesting that taxing the wealthy and corporations aren’t the only options that could be considered by Democrats, who control both chambers.
“I am willing to have a robust conversation on how we achieve tax fairness, which requires looking at both revenue generation and cuts,” Daughtry said in a written statement. “For too long, both parties have painted themselves into a corner when it comes to tax policy. We need to make sure we have conversations that revolve around real people and their needs in 2025.”
Spokespeople for House Speaker Ryan Fecteau, D-Biddeford, and other Democratic leaders in the House did not respond to questions on Monday afternoon.
Republicans, meanwhile, have already vowed to oppose any state budget that increases taxes.
“This budget has zero Republican votes,” Senate Minority Leader Trey Stewart, R-Presque Isle, said last week. We know that Maine is already one of the highest taxed states in the country and Mainers are already struggling to scrape by. This budget just throws gas on that fire.”
Mills anticipated the proposals to tax the wealthy and addressed them in last week’s State of the Budget Address, saying she would not support changes to broad-based taxes, such as income and sales taxes.
“I have opposed changing our tax rates, much to the dismay of my Democratic friends, because stability and predictability, for our people and for entrepreneurs and investors looking at Maine, cannot be overstated,” said Mills, who last year vetoed a bipartisan bill to restructure tax rates. “To raise broad-based taxes and to cut economic development tools are not winning strategies.”
The warnings did not stop advocates from urging broad tax reform during the hearing Monday.
Maura Pillsbury, state and local tax policy analyst for the Maine Center for Economic Policy, a left-leaning advocacy group, said Maine is “at a crossroads” and lawmakers should focus on ways to sustain programs like the new Paid Family and Leave, free community college and free school meals.
“We need a tax system that asks more from those who benefit most from our economy,” PIllsbury said. “It’s simply wrong to ask Maine’s undervalued caregivers to take a pay cut, while shielding the wealthiest.”
Ann Danforth, senior policy associate for Maine Equal Justice, a nonprofit that advocates for low income Mainers, urged lawmakers to consider “progressive revenue options,” while rejecting the “false choice” between programs cuts and an unbalanced budget.
Danforth promoted a so-called “millionaire’s tax,” as well as restructuring the state’s existing tax rates to provide relief at the bottom and higher taxes for the top. She also called for higher taxes on corporations.
Lawmakers are just beginning their review of the proposed two-year spending plan and only a fraction of the more than 2,400 bill requests have been drafted and published.
But a quick survey of the bill titles suggests lawmakers will have several opportunities to consider tax reforms.
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