Wednesday, April 22, 2009

State budget discussions continue

We began this Wednesday in some very foggy weather. The forecast says the big rain we had yesterday is pulling away, but we remain in an unstable situation. We could see a little sun today once the fog dries off, but more rain is expected tonight. All should start to change tomorrow and this weekend is still expected to be “The Weekend” of the region so far this year.

The Maine Legislature’s Appropriations Committee resumes sessions today trying to close a projected revenue shortfall and make changes in the income tax rates and the number of items being taxed by the sales tax.

What the legislators call Tax Reform is really a way to get more money out of our pockets. They call it reform because if it should pass, and it probably will, it will lower the highest rate of income tax from 8.5% to 6.5%. Almost all Mainers who pay income taxes pay the highest rate as it goes into effect with incomes under $20 thousand. That will give taxpayers a little more money to spend. For a taxpayer with a taxable income of $30, 000, for example, it would mean about a $600 addition to spendable income.

On the other side of the coin, legislators want to increase the number of items that would be subject to sales tax. They range from recreation activities to repairs on homes and cars. Furthermore, they want to increase the sales tax on food sold in restaurants and lodgings. The legislators claim this would make the changes revenue neutral and would put more of the burden on visitors to the state thus saving money for Mainers.

The restaurant and lodging associations say the reasoning is specious. More Mainers eat in restaurants and stay in lodgings than visitors. Thus lawmakers are putting more in one pocket but taking right back out of the other. If, indeed, the “reform” were revenue neutral, then why make the change at all.

Since many of the poorer Mainers don’t pay income taxes but everyone must pay sales tax, this so-called reform can only hurt the most the least able to pay, the very base Democrats depend on for their power. It amazes me how our people continue to be hoodwinked by the party they look to for help. We’re told they’re making life better for everyone. They’ve been making this claim for 35 years and we still believe them.

At the same time the committee is trying to figure out how to find more money in the budget to fill a $350-million shortfall in the $6.1-billion budget submitted by Governor Baldacci for the next two years. That shortfall is expected to grow dramatically when the next revenue forecast is released the first of May. Do I see another tax reform coming? Like increased taxes and fees? I certainly do not see any reform in state spending.

That expected shortfall was unofficially raised to $500-million yesterday, but could be even higher when that revenue forecast is released, possibly next week.

The Appropriations Committee will be vying with other lawmakers in Augusta today for activity. A public hearing is being held at the Augusta Civic Center on bills which would make marriage between members of the same sex legal in Maine. Proponents say marriage would give more protections to the couples while opponents say it would destroy the concept of marriage as we know it.

Marriage as we know it is between one man and one woman capable of producing children.

The public hearing is expected to last all day but actual deliberations won’t begin until next week.


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