Democrats Doing A lot Of Complaining But Offering Few Solutions
Even the most bitter partisan critics of Gov. Paul LePage will have to admit that his proposed budget package is as bold as anything Augusta has seen in half a century.
The centerpiece of the LePage plan would dramatically reduce Maine’s personal income tax, and put the state on a path to freedom from income taxation.
Already, the arrows are flying in the Governor’s direction, from all the usual suspects. Make no mistake: LePage Derangement Syndrome persists in Maine’s progressive coastal enclaves, among the academic elites, and in the liberal media establishment. All these folks are still in a state of shock after LePage was re-elected last fall with more votes than any Governor in Maine history.
In any case, I think it’s important to put this debate in historical context. Today, Maine has one of the most steeply progressive state income taxes in the country, even after the historic rate reduction Gov. LePage signed into law in 2011, cutting the top marginal rate from 8.5% to 7.95%.
So how did we get here?
Enacted in 1969, Maine’s state income tax was pegged at a top rate of 6% on income over $50,000. Adjusted for inflation, that’s the equivalent of over $300,000 today. The new tax was enacted as an emergency measure to fund a 37 percent increase in spending over the previous biennial state budget. That’s right, a staggering 37 percent increase in state spending, to cover welfare and Medicaid expansion (sound familiar?), increased retirement benefits for state employees, and the creation of several new state bureaucracies.
Even so, the General Fund state budget for the 1969-70 biennium was just $335 million. Today the budget is well over $6 billion with a big fat “B”. If it had simply kept pace with inflation and population growth, the current budget would be less than $2 billion rather than $6.2 billion.
To say that the adoption of the state income tax fueled explosive growth in the size and scope of state government would be an enormous understatement.
The Bangor Daily News editorialized against the new tax, and scolded legislators for their “radical departure” from sound tax and fiscal policies: “The citizens of Maine have been poorly served by their elected representatives. The cupboard will be bare two years hence and you may be sure that an upward revision of the new income tax will be sought, while…pressure groups will be bidding for increased appropriations for their bureaucratic programs.”
By the time Gov. Paul LePage took office in 2011, the top rate had increased from 6% to 8.5%. But the higher rate now kicked in at just $19,950 of annual income. Call it the Democrats’ war on the working class if you like. In effect, Maine was treating anyone with an entry-level job like a millionaire, in the highest tax bracket. And yet state government was effectively broke, a deadbeat debtor with a half-billion dollar unpaid medical welfare debt to Maine hospitals, and a decade-long series of emergency supplemental budgets enacted to feed the beast, as welfare spending cannibalized the state budget year after year.
This is the legacy of more than four decades of liberal Democrat control of state government, and we won’t be able to fix it in just two or three or four election cycles.
Ask yourself this: Are we better off with five times as many state employees as we had when we adopted the state income tax? Are the roads better? Are Maine students better able to read, write, and compute today compared to 1970? Is there less poverty and more economic opportunity for Maine people after 40-plus years of nanny-state liberalism in Augusta?
As I begin my second term in the House, it is my sincere hope that we can find some Democrat legislators in the mold of former state Rep. Jim Dudley (D- Enfield), who was first elected to the House in 1958. Jim spoke eloquently and prophetically in opposition to the state income tax proposed by Gov. Ken Curtis in 1969: “I feel this afternoon like an old man drowning in a sea of liberalism. I was here ten years ago when we had approximately 715 people on the state payroll. I note that this year we did get up to 2,295….If you take these figures into consideration along with how much welfare has grown and compute this for ten years hence, you will pretty much find that you are either going to be retired, working for the State of Maine or on welfare at the end of ten years if this rate continues.”
Lawrence E. Lockman, R-Amherst, represents District 137 in the Maine House of Representatives, and serves as the ranking member of the Labor, Commerce, Research & Economic Development Committee. He may be reached at email@example.com or 460-6518.