Mills Budget Provides More School Funding, Fails to Fully Fund Revenue Sharing & Keeps LePage’s Tax Cuts

The liberal-leaning Maine Center for Economic Policy (MECEP) praised Mills for her support for Medicaid expansion, but criticized the proposal for failing to reverse LePage’s income tax cuts for the wealthy. Last year, MECEP and the Institute on Taxation and Economic Policy (ITEP) released a report that found that tax cuts passed during the LePage administration will cost the state $864 million in revenue this biennium. About half of the tax breaks went to the top 20 percent of earners while the bottom 20 percent received less than 5 percent of the benefit, the analysis found.

Under Maine’s current tax code, households earning annual incomes of between $35,800 and $56,100 pay 9.6 percent, those earning between $56,100 and $91,000 pay 9.4 percent, and families earning between $91,000 and $185,500 pay 9.9 percent of their incomes to state and local taxes. Meanwhile, the top 1 percent, those earning over $434,500 a year, pay just 8.6 percent, according to ITEP.

“By maintaining LePage-era tax cuts, this budget does not provide the necessary resources to fully fund education and local services,” said Garrett Martin, MECEP’s executive director, in a statement. “As budget negotiations unfold in the coming weeks, MECEP will continue to advocate for a real, practical conversation on how to address the revenue challenges created during the LePage years so we can finally make real investments in good schools, good jobs, healthy families and thriving communities.”

Click here to read the full story, published February 14, 2019, in the Free Press.