October 21, 2018
Editorial

MAINE’S TAX POLL

The poll released by Market Decisions this week showing that 80 percent of Mainers oppose expanding taxes and fees even temporarily to cover the state budget gap is being waved like a banner by those who believe state government is bloated.

Aside from the “duh” factor – who would favor higher taxes? – the survey does seem to mirror the mood of Maine residents as they endure the endless stream of bad news out of the State House. But the poll’s findings are something like the answers students provide when teachers “teach to the test,” parroting what they’ve been told. When state officials and lobbyists repeatedly assert that Maine is among the highest-taxed states in the nation, it’s not surprising that residents respond accordingly and oppose new or higher taxes.

But the assertion that Mainers bear one of the nation’s highest tax burdens is only the first part of a statistical truth. The rest of the equation is that Mainers pay more as a percentage of income. So it follows that the tax burden can be decreased by increasing income. Yet little in the debate on these issues addresses the problem of increasing wages. Another infrequently stated fact is that a slowing national economy, not mismanagement by the governor and Legislature, is the cause of the state budget problems.

A vibrant economy causes personal income to rise. Government can’t create a good economy, but it can create an environment in which an economy can grow. It does so by investing in education, transportation infrastructure, research and development, and business incubator programs. Investing in people, it could be argued, is also necessary; the social safety net is a moral imperative, but it also allows people to go to work each day and encourage their children to become educated so they can flourish as adults.

State government likely can be downsized, and the budget crisis presents a unique opportunity to do so. For the first time in more than 15 years, it’s safe for fiscal conservatives to come out of the closet in Augusta and not feel they are risking being labeled Scrooges. The state employs nearly 14,000 people, and, as with most businesses, payroll and benefits combined rank second on the list of expenses. Reducing staff and combining functions is preferred over eliminating programs that directly help people.

But in the absence of new revenue, the choices are tough: cut spending to cut taxes, or invest to help the economy and increase wages?

The proposal by the Department of Labor to cut 10 of its 21 career centers is a good example of the dilemma legislators face. Asked to identify cuts, the department has correctly identified underused centers. But when the proposal was aired before a legislative committee, legislators representing rural areas pointed out the inequity – also correctly – that career centers in less-populous areas, where mill and other old-line jobs have disappeared, would be eliminated while centers in more populous areas, where unemployment is lower, would be retained.

Perhaps Market Decisions could conduct a more in-depth poll, and ask those 80 percent who oppose new taxes just what they would like to see cut.


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