April 05, 2020

Democrats near consensus on how to spend surplus

AUGUSTA — Legislative Democrats are getting close to a consensus on what to do with a state revenue surplus, but Senate President Mark Lawrence said Wednesday that lowering the sales tax does not appear to be an option.

That would put the majority Democrats on a collision course with Republicans, who want to see the sales tax dropped by a full penny on the dollar, from 6 percent to 5 percent.

The state has more than $200 million in surplus tax revenues, and $184 million has been tentatively earmarked for tax relief.

“People are reaching a consensus on property taxes being a central focus,” said Lawrence, of Kittery.

But what form the property tax relief would take is not yet known. Lawrence said some options include expansion of the circuit breaker program and adjusting the public school funding formula to ease local tax burdens.

Republicans have included a 1-cent rollback in the sales tax among their priorities for 1998, saying it would fulfill a promise state government made in 1991 when the tax was increased to help patch a gaping budget hole.

But Lawrence said Wednesday the state cannot afford a full penny reduction. The two-year cost of lowering the tax is estimated at about $220 million, less than the state has in reserve.

Democrats and Republicans, however, were in sync Wednesday on their commitments to spending for education as they both drew attention to a state teachers union poll that showed strong public support for schools.

“It was nice to see the poll,” said House Minority Leader James Donnelly, R-Presque Isle, “but Republican leaders, by instinct, knew how Mainers felt on these issues without the poll.”

Lawrence said the Maine Education Association’s poll shows Mainers want education to be a priority, and he said Democrats “are committed to making education a No. 1 priority.”

In the early December survey of 501 Mainers by Kiley & Co. of Boston, 57 percent said they believe the public schools need more money. At the same time, 41 percent said they preferred property tax relief, 27 percent supported reductions in the income tax and 20 percent said they want the sales tax cut.

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