LePage tax scheme a bad deal for Maine

A policy that raises taxes on more than 270,000 low- and middle-income families and blows a hole in the budget with red ink is a failure.

There’s no other word for it.

At the urging of Gov. Paul LePage, Maine has embarked on a disastrous taxation experiment that will hurt families making $27,000 a year or less, drive property taxes higher and reduce the amount of money that’s available for roads and bridges, schools and health care.

A new report by the Maine Center for Economic Policy, a nonprofit think tank that closely follows tax and spending policy in Maine, found that the tax cuts passed by LePage have overwhelmingly benefitted people who make more than $323,000 per year.

Meanwhile, the costs of those cuts have fallen on property tax payers, low- and moderate-income families, and towns and municipalities.

Plus, just for a bonus, the state reported on Monday that revenues for the first quarter of the year are failing to meet expectations, in part because of the tax cuts.

The declining revenues are part of a much bigger problem to come because, despite draconian cuts already, the LePage administration left the largest part of the tab for its tax policy unpaid.

“We’re estimating a loss of $399 million over two years,” state Rep. Peggy Rotundo, a Lewiston Democrat and a member of the Appropriations Committee, told Mal Leary of Capitol News Service.

We know what happens when you cut taxes and don’t pay for it: You face mounting deficits.

The governor has made it clear that his goal, in fact, is to cut taxes further, even while the impacts are causing significant problems in local communities and for Maine families.

Continued adherence to tax-cuts-above-all-else will further reduce resources available for the things that Mainers really care about and need, including quality K-12 education, higher education, job training, improving access to health care, good roads and bridges, and quality jobs.

As the Maine Center for Economic Policy states: “This is the wrong direction for Maine. Instead of cutting taxes to benefit the wealthy, we need to move toward a fair tax system” that strengthens communities and makes the state’s economy stronger.

Lawmakers in Augusta pass a lot of legislation every year. Some of it’s good, some bad, most of it well-intentioned.

But if you want to really understand the priorities of the governor and the Legislature, look at budget and taxation policy.

That’s where the rhetoric meets the details of governing.

And, as the MECEP report makes clear, in Maine right now, our priorities are wrong.

We have put tax cuts for people making more than $323,000 ahead of just about everything else.

Reducing their tax bill means that $84 million in state aid intended to reduce property taxes has been scraped, shifting the costs for important services onto the backs of already overburdened property tax payers.

It means $76 million less state support for K-12 education in 2013 than there was in 2011. Costs aren’t going down. Schools just have to make due with less.

It means families of modest means will pay more in combined state and local taxes than they would have before.

Further, the LePage administration has pushed through terrible cuts in public health insurance programs that threaten thousands of Maine families.

At LePage’s urging, more than 35,000 Mainers have lost access to health insurance coverage, and 5,500 seniors and people with disabilities were the victims of cuts to prescription drug programs

Even while its policies have drastically reduced state revenue, the administration has also pleaded poverty with the federal government in hopes of dropping health insurance coverage for even more poor people.

LePage’s tax policy has created the problem, which he hopes to use to carry out an ideological mission of reducing access to public health care programs.

The LePage tax schemes are bad public policy.

Promising tax cuts is a popular electoral strategy. Politicians love how it sounds, especially when the ramifications are hidden from view.

We’re getting a clearer picture now of how those promises translate to everyday life.

They turn into a tax shift, fewer teachers, policemen and firefighters, higher property taxes and fewer services for the people who need them the most.

That’s a bad deal.