While most observers were anticipating the big floor fight over the attempt to give
away Maine’s electoral college votes yesterday in the Maine House, a bill that
would have modestly cut Maine’s individual income tax rates was also on the
Rep. Beth O’Connor, L.D. 1292 “An Act To Lower Maine’s Individual Income Tax”
would lower all of Maine’s individual income tax rates over a three year
period, but target the largest reductions to lower- and middle-income Mainers.
The top income
tax rate would be reduced from 7.15% to 7.0%.
income tax rate would be reduced from 6.75% to 6.0%
income tax rate would be reduced from 5.8% to 5.0%.
testimony, Rep. O’Connor referred to the state’s surplus, which Maine Examiner
has reported is equal to about $850 per middle-class Maine family, saying if
there is a surplus, she “would think that
the natural path
would be to
offer the people
A review of the Legislature’s public
hearing documents on L.D. 1292 shows that not a single person submitted
testimony in opposition to the bill.
But Rep. O’Connor’s reasoning, the state’s surplus, and public testimony in support of the bill did little to sway Maine House Democrats, who killed the bill in a straight party line vote, joined by several liberal independent legislators who also voted to oppose it.
The latest reports on Governor Janet Mills’ proposed budget indicate she, along with legislative Democrats, want to spend virtually every penny the state takes in over the next two years, which would leave no room for tax relief in budget negotiations. In fact, some groups are now calling for tax increases to allow for even more spending increases.
Reducing Maine’s income tax had been a high priority for Governor LePage and Republicans in previous years, so much so that Governor LePage even left a proposal to reduce Maine’s income taxes for Governor Mills when she took office.
That proposal does not appear to have been given much weight by Mills, who has focused on bulking up spending in a host of areas in the budget instead.
The bill also would have changed cross references in the Tax Relief Fund for Maine Residents, a fund that is designed to accrue surplus revenue dedicated to reducing Maine’s individual income tax.