Lawmakers Clash Over Proposed Tax Hikes

Rob Poindexter

Updated 2 years ago

Some fiery exchanges marked a spirited debate over a proposed tax hike that’s designed to help ease the burden on Maine’s cities and towns, help Maine market it’s tourism industry and help fund schools.Governor LePage’s plan to end municipal revenue sharing in his budget has met with fierce opposition from municipalities throughout the state. Education advocates have also been demanding the state live up to its obligation of funding 55% of public schools’ budgets. It seems no matter how loud the uproar, there’s never enough money to go around.Friday in the Taxation Committee, lawmakers heard three proposals that supporters say will raise revenue. One would raise the state sales tax from 5% to 5 2/3% using the revenue generated to fund public schools to the voter mandated 55% threshold.The bill also requires the Department of Administrative and Financial Services, Bureau of Revenue Services and the Department of Education to evaluate the effect of the increase of the sales tax on the funding for essential programs and services for kindergarten to grade 12 education and report their findings and recommendations to the joint standing committee of the Legislature having jurisdiction over taxation matters and the joint standing committee of the Legislature having jurisdiction over education matters.Portland Independent Ben Chipman wants to raise the state’s lodging tax from 7% to 12%, beginning in October of this year. 60% of the revenue attributable to the tax increase is distributed to the Tourism Marketing Promotion Fund, and 40% is distributed to the municipality in which the living quarters that generated the revenue are located.”So it’s an opportunity to raise money from out of state tourists to spend on marketing to get more tourists here. They will then spend money in our economy and it will generate a lot of money for the state,” Chipman told the committee.It’s a plan that drew the ire of Republicans on the committee. “You’re serious about this, this is a serious proposal?” asked a clearly irritated Senator Doug Thomas, a Ripley Republican.”This is a serious proposal and I’m shooting a little high and I know 12% is a stretch and maybe that’s a little bit too much,” Chipman responded. “Maybe we need to go to 9 or 10% and bring ourselves in line with the New England average. I don’t think we’re gonna lose any business from that and we’re gonna generate some extra revenue.””You’re looking at a person who would go somewhere else of he got whacked 12%,” Thomas fired back.Susan Dyer-Taylor of Scarborough, a teacher at a youth correctional facility in Maine, spoke in support of the proposals, saying if the governor’s revenue sharing cuts pass, and her property taxes go up, it would be devastating for her, despite the fact she’s working two jobs. “I can’t retire,” she told the committee. “But what may happen before then is, I may lose my home.”Those who make their living in tourism and lodging in Maine say an increase in lodging tax could decimate the the tourism industry.”The world we live in is one of competition. Travelocity, Orbitz, we’ve all heard of those third party sites. People are looking at the bottom line and if our tax is well in advance of somebody else’s then obviously that bottom line is going to show a bigger number,” said Greg Dugal of the Maine Innkeepers Association.The committee has lot to weigh before it holds a work session on the proposals in the coming weeks.Should the bills somehow pass through committee and votes in the House and Senate, it’s highly likely Governor LePage would quickly veto any legislation that raises taxes. It’s also unlikely that there would be enough votes in the House and Senate to override such a veto.


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