August 23, 2019

Panel wants time to offer major tax changes

AUGUSTA – Taxation Committee lawmakers Monday pressed for a delay in action on one Baldacci administration tax initiative and expressed doubts about another.

First, as promised Friday, tax panelists formally brought their recommendations on tax-related provisions in the governor’s $6.4 billion biennial budget package to the Appropriations Committee and urged the panel to defer action on a dollar-a-pack hike in the cigarette levy.

Later, in the course of hearing a variety of other tax bills, Taxation Committee members focused on another gubernatorial plan – a proposed constitutional amendment designed to freeze the value of the land of primary residences of year-round Mainers until the property is sold – similar to one that has drawn support in the past.

At a morning session, tax panel members told their Appropriations Committee colleagues they were not passing judgment on a tobacco tax increase but merely insisting that no major taxation changes now should be made in isolation.

Taxation Committee House Chairman John Piotti, D-Unity, reiterated the panel’s intention to develop a more comprehensive package of tax system changes – frequently mentioned are an income tax cut, a sales tax expansion and new steps to curb property taxes – before the end of the month.

“We are very hopeful that we will have a tax reform package within three weeks. … So we’re not entirely passing the buck here,” Piotti said Monday morning.

The Taxation Committee plea for time got a respectful and sympathetic response.

“We’re working for a two-thirds budget,” Appropriations Committee Senate Chairwoman Margaret Rotundo, D-Lewiston, said afterward, “so we’ve got time.”

Saying she was speaking for herself and drawing a distinction between some time and a lot of time, Rotundo added: “We want to get the budget wrapped up in the coming weeks, by mid-April.”

Rotundo’s comments were among the strongest suggestions yet that majority Democrats are not counting heavily on a procedural option for attempting to enact a simple majority budget by or around April 1.

Eyeing the governor’s constitutional amendment proposal Monday afternoon, Taxation Committee members were noncommittal.

“It’s hard to get a super-majority on anything around here,” said Taxation Committee Senate Chairman Joseph Perry, D-Bangor, referring to legislative margins needed to send such a measure out to referendum.

“I think if we’re going to pass a version of his bill, it probably has to be part of a bigger package,” he said.

Gubernatorial spokeswoman Martha Freeman, the director of the State Planning Office, said the administration was hopeful.

“As always, we’ll be open to ideas that other people have,” she said.

Also aired before the Taxation Committee were wide-ranging tax reform packages offered by Democratic Reps. Thomas Watson of Bath and Anne Rand of Portland.

The proposal by Watson, in part, would extend the sales tax to a range of recreational activities and reduce the state’s top income tax rate from 8.5 percent to 8.25 percent.

Rand, supporting a local option sales tax, would broaden the sales tax – suggesting, as one example, covering food – and raise the threshold for applying the top income tax rate.

With the Appropriations Committee serving as the main venue for discussion of Gov. John Baldacci’s budget package, attention on Tuesday is expected to return to education – in particular, calls by the governor and others for a cost-saving streamlining of Maine’s statewide network of school systems.

The Baldacci budget package relies on raising $136 million from new tobacco tax receipts and Republican Sen. Richard Nass of Acton used the Monday morning joint committee forum to emphasize the desirability of cutting spending.

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