In the first debate of the gubernatorial campaign, famously tax-critical former Republican Gov. Paul LePage suggested he would suspend all new taxes put in place since the pandemic began to combat inflation.
The comment Tuesday evening was not out of line for LePage, who was governor for two terms and is seeking a third. One of his signature policies was to reduce the state’s top marginal individual income tax rate from 8.5 percent to 7.15 percent in 2011. He has since proposed eliminating it altogether.
But Maine has not introduced new taxes since the pandemic began, according to the state and a review of the Legislative Taxation Committee bills from 2020 to 2022. That has been partially due to Democratic Gov. Janet Mills’ strong aversion to anything that might look like a tax increase during her administration, something that has occasionally put her at odds with progressive members of her caucus.
The tax suspension idea from LePage came after he said he also would consider suspending the diesel tax to help reduce inflation on foods trucked into the state as part of an overall plan in the event of a recession and revenue drop in the state. He said such suspensions — if he were re-elected — would be kept in place until inflation dropped.
“I would take a look at suspending all taxes that were put in place since the pandemic,” he said.
“You might suspend them until we reach an inflation rate of 2 percent.”
After the debate, the LePage campaign clarified the statement was also meant to encompass regulatory fees, pointing specifically to the law that bans single-use plastic bags and charges consumers for 5 cents for a carry-out bag. That law was passed in 2019 and slated to go into effect in the spring of 2020, but was pushed back for over a year during the coronavirus pandemic.
Taxation bills can be hard to track because not every bill is easily defined as such, according to the nonpartisan Legislative Law Library in the State House. But the 56 bills that passed through the taxation committee included anything from technical changes to several tax exemptions, including nonprofit youth camps, affordable housing projects, and firearm containers.
Lawmakers also approved a measure that required municipalities to freeze the property tax rate of older Mainers if they had lived in their home for 10 years. Most of the bills’ fiscal notes either included nominal general fund revenue increases, decreased general fund revenue or had negligible impact.
Mills campaign spokesperson Scott Ogden also pointed to the restoration of municipal revenue sharing and the expansion of the earned income tax credit, which helps lower income Mainers. He said LePage has “no serious plans” for helping Mainers.
During the debate, the governor pointed to the $850 checks provided to Mainers earlier this year — which LePage has criticized — and noted the state has economists and revenue forecasters to ensure the state does not go over budget.
“People are thankful for those checks,” she said. “People know what they need to do individually with that money.”
LePage criticized the $850 refund checks at Tuesday night’s debate. He said he’d instead take some of the state money used for the refunds and offer it to oil companies and ask them to lower the cost of fuel in exchange for a subsidy.
Mills recently re-upped her promise to not raise taxes and has clashed with lawmakers over attempts to increase fees. She threatened to veto an increase to the vehicle inspection fee — which was later killed by lawmakers — and the Legislature altered a bill that would have increased the cost of fees paid by pet food makers from $80 to $100 for animal welfare investigation to change how current distribution licensing fees are distributed after she indicated opposition, the Bangor Daily News reported.
She did veto a bill aiming to increase the real estate transfer tax on properties over $1 million, saying it would go against her promise and would do little to boost revenue to a state affordable housing fund.
It was a frustrating moment for taxation committee co-chair Sen. Ben Chipman, D-Portland. “I wish she would consider raising some taxes,” he said, adding he tried to talk to Mills about the bill before it went to her desk. “But we were told [the bill] was a tax increase and there was nothing to talk about.”
While Assistant Senate Minority Leader Matt Pouliot, R-August, said he could not think of any recent tax or fee increases worth suspending, he said LePage’s statement was in character with his desire to reduce taxes overall. He said many of Mills’ budget accomplishments, such as raising the state’s share of K-12 public education costs to 55 percent, would have been difficult to achieve without raising taxes if not for an influx of federal pandemic stimulus money sent to states.
“In general anything we can do to help Mainers keep more money in their pocket is helpful,” he said.
Caitlin Andrews covers state government for The Maine Monitor. Reach her with other story ideas by email: caitlin@themainemonitor.org.
