Saturday, May 18, 2013
Rep. Seth Berry
Democrats are deeply concerned about Gov. Paul LePage's recently unveiled budget. As proposed, the budget is a tax shift that will hurt our economy and unfairly burdens our middle class, the elderly, small businesses and the poor.
The governor's two-year budget cuts $425 million in funding to our local communities. This $425 million tax increase will fall disproportionately on our middle class in the form of property taxes -- one of the most regressive forms of taxation.
Maine people want solutions that will spur the state's economy and grow the middle class. This budget passes the buck and derails those efforts in Augusta when Mainers are looking for balanced and reasonable solutions to the state's challenges.
Democrats know the economy grows best from the middle out, not the top down. It grows best when there is money in the pockets of middle-class Mainers. This budget is the reverse approach: a continuation of top-down, trickle-down economics that have failed us in the past.
The tax shift to our local communities and their residents includes the suspension of the revenue-sharing system between the state and municipalities, the elimination of key property tax reduction measures, cuts to excise tax revenues for local roads and the unwarranted shift of additional educational expenses to local districts.
LePage's budget makes none of the hard decisions that Maine people expect from Augusta. Rather, its tax shift thrusts those decisions onto local officials and violates significant financial agreements reached over decades of state-municipal relations.
Two years ago, the governor and the Republican majority in the Legislature demanded more than $400 million in tax cuts primarily for the wealthy. At the time, they claimed future revenues would cover them. Predictably, that has not occurred. Now, the governor is proposing to shift the entire cost of these cuts directly onto local elected officials and Maine's middle class.
As a former selectman, I know how difficult it already is for local communities to provide the services that residents expect and deserve while keeping property tax rates down. As a former teacher, I know how squeezed school districts are as they try to provide the very best learning environment for our children.
And as a parent of children in public school and a local property taxpayer, I share the worries of the vast majority of middle-class Mainers as we face the loss of local services, cuts to education and rising property tax bills.
Property taxes hit the middle class particularly hard. While wealthier residents tend to have more varied investments, including those with lower taxation rates, the net worth of middle-class people is heavily concentrated in their homes.
I well remember being a selectman and meeting with a resident who was unable to pay local property taxes. We combed through the household's finances in search of a way to avoid the personal disaster of losing their home. We were unable to find a way out. It was an experience that I would not wish upon any Maine resident or local official. But these are the kinds of decisions that local officials will face more and more.
Already, we are starting to hear from local municipal and school officials who are very worried about the damage that would be wrought by the governor's budget.
In Bowdoinham, the two-year cost shift to the town would be more than $630,000. In addition, many residents would lose property tax and rent reductions worth as much as $1,600 per household, and would be forced to pick up an increased share of local education costs.
On average, a family of four can expect a tax increase of more than $1,000 per year if the governor's budget passes as written.
Maine needs a tax system that is simpler, fairer and better balanced -- the opposite of the option presented to us by the governor. To reverse the tax shift to the middle class and to help middle-class Mainers keep their homes, I am introducing legislation this year to expand the Maine Residents Property Tax and Rent Refund Program, rather than to gut it as the governor has proposed.
I am hopeful that our Republican colleagues also will see how devastating these budget proposals will be to Maine families and Maine's economy. Democrats are ready to find common ground to avoid the hardships this budget will impose on middle-class Mainers.
House Majority Leader Seth Berry is a resident of Bowdoinham, a former selectman and a past member of the Legislature's Taxation Committee.