After a bruising legislative session in which Gov. Paul LePage saw his ambitious tax reform plan and several “welfare reform” proposals go down in flames, the governor and his allies are taking his agenda directly to Maine voters. On Wednesday afternoon, the Maine Republican Party announced that it will soon begin collecting signatures to place two questions on the November 2016 ballot. One would eliminate the income tax and the other would put several new restrictions on welfare benefits, including banning asylum seekers from receiving emergency food and housing assistance. 

“We need to end welfare fraud and abuse,” said GOP Chairman Rick Bennett in a statement. “We need to help grow our economy and create jobs by lowering the individual income tax for Maine’s working families.  We can help end welfare fraud and abuse while improving the economy with income tax reductions. That effort starts today.”

The first proposal would gradually cut income tax rates starting in 2018 until they reach a flat 4 percent rate in 2021. It would then require the state to begin ratcheting down the income tax in 2024 until it is eliminated by using tax revenues from the state’s liquor contract to offset revenue losses. Liquor revenue brings in about $45 million a year.

But it’s unclear how the proposed law would offset the roughly $600 million deficit it would create in the first few years if voter-mandated tax cuts take effect. At a town hall meeting in Farmington on Tuesday, the governor said that the state could raise sales taxes and cut the education budget and welfare spending. He has maintained in the past that he can find $250 million in savings from the education budget by consolidating schools, reducing the number of superintendents and putting more classes online.

Liberal critics immediately blasted the proposal as a give- away to the rich that will come at the expense of schools and property taxpayers. The Maine Education Association noted that schools are already losing out on $200 million a year due to the state’s refusal to fund them at 55 percent as required by law. The deficit caused by the proposed tax cut is roughly half of the current state funding for education.

“Local property taxpayers and the state share the cost of funding public schools,” the MEA wrote in a statement. “If the state fails to pay its share, the local community is required, by law, to raise the difference which will increase property taxes in communities across the state.”

 


The Washington-based Institute on Economic Policy estimated that 50 percent of the economic benefit from the proposal would help people making over $175,000 per year.  Those earning over $390,000 would get a tax cut of $21,000 while those earning less than $23,000 would get about $14. 

“Welfare Reform”

The Maine GOP’s second initiative aims to enact several restrictions on welfare programs that the governor failed to pass through the Legislature. It would ban food and housing assistance for legal noncitizens including asylum seekers fleeing war-torn countries; prohibit convicted drug felons from receiving Temporary Assistance for Needy Families (TANF) and Supplemental Nutrition Assistance Program (SNAP) benefits; require TANF recipients to be drug tested; require TANF recipients to provide proof that they have applied for jobs before receiving the benefit; eliminate “good cause” exemptions from work requirements in the TANF program; request the USDA to allow the state to ban “junk food” from being purchased with SNAP; ban users of EBT cards (which contain TANF and SNAP benefits) from withdrawing cash at smoke shops; places a 60-month cap on receiving alternative assistance for food and shelter; prohibit cash withdrawn from TANF funds from being used to purchase tobacco, liquor, gambling, lotteries, tattoos, bail, travel services and foreign money remissions. 

The Maine GOP has pledged its full support for both questions, but it could be an expensive proposition, wrote veteran Democratic campaigner David Farmer in his Bangor Daily News column this week. Farmer estimates it could easily cost $200,000 to gather the roughly 62,000  signatures needed for just one ballot question. He wrote that running a referendum campaign without opposition can cost millions of dollars; “highly charged issues such as taxes and aid to working families are likely to cost even more.”

Republican operative Lance Dutson, who is a frequent critic of LePage, tweeted that the real purpose of the initiatives is to divert resources from legislative elections. He called the referendums a “hostile act” by the party and the governor to threaten legislative Republicans. LePage announced in Farmington that he would hold frequent town hall meetings across the state until the 2016 election to promote the policies contained in the initiatives.