BERRYBLOG: Amendments Will Be Offered to TABOR Bill

Posted on March 27, 2012. Filed under: Uncategorized | Tags: , |

LD849 as amended, An Act To Provide Tax Relief for Maine’s Citizens by Reducing Income Taxes, is now a bill sponsored by Sen. Jon Courtney (R-York). The amendments can be found here.

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From Rep. Seth Berry’s blog; crossposted with permission:

Amendments Will Be Offered to TABOR Bill

When the TABOR proposal called LD849 hits the House floor — possibly this morning — Democrats will offer alternatives adding fairness, fiscal responsibility, and property tax reductions.

We strongly object to this far-reaching measure to do what Maine voters have rejected three times, by increasing margins, but feel it can at least be made better before it is rammed through without public input.

I am also releasing the latest analyses by Maine Revenue Services (MRS) today, showing a vast disparity between winners and losers if this bill is fully implemented:

Mary Adams via Bangor Daily News

Mary Adams, the mother of Maine TABORs – from The Bangor Daily News editorial. By ratcheting down the income tax without paying for it, MRS shows LD849 would give an average tax reduction of only $1 to the bottom 20% of income earners. This group includes, for example, a single parent of two working full-time at minimum wage. It also includes many low-income seniors without pensions, who depend on Social Security.

By comparison, the tax cut would give an average reduction of $21,638 to the wealthiest 1% of Maine residents. This group makes an average adjusted income of roughly three quarters of a million dollars.

“Maine’s tax code is already unfair to the hard-working coastal families I represent,” says my colleague, Rep. Walter Kumiega of Deer Isle. “We should be making work pay and lifting families out of poverty, not passing another gift to high income earners.”

According to a study released by Maine Revenue Services last summer, Maine’s wealthiest 1% already pay an effective tax rate that is 14% lower than average.

Rep. Kumiega’s amendment would use the mechanism in LD 849 to reduce income taxes, but would do so more fairly. The amendment increases Maine’s Earned Income Tax Credit, based on a federal program created by President Reagan to reward work and lift families out of poverty. In addition, it uses LD 849’s funding to adjust the income tax brackets for all taxpayers, benefiting more families more fairly.

Two other amendments will also be offered on the House floor.

The second, sponsored by my colleague Rep. David Webster of Freeport, would require that the tax cut for each future year be fully funded by surplus revenue, as supporters of the bill have claimed it already does. In reality, the bill pays only for the initial year, locking in and ratcheting down revenues into the future.

“As written, this bill is as irresponsible as taking on a car payment after winning a $100 on a scratch ticket,” said Webster. “Maine’s families and businesses don’t buy what they can’t afford, and neither should we.”

Our third compromise amendment, which I will offer, would put property tax reductions ahead of income tax reductions. As mandated by Maine voters in June 2004, my amendment would put money first towards funding 55% of K-12 education.

According to the nonpartisan fiscal office of the Maine Legislature, full implementation of LD 849 as written would cause losses to Maine schools, roads, bridges, and towns totaling over $1.2 billion per biennium.

As written, this TABOR measure would enact future tax breaks, take credit for them now, and let others make the tough choices to pay later. We’ve done that enough lately, and we hope our amendments may offer viable alternatives to moderates who still do believe in fairness, paying as you go, and putting people first.

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