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Tax Conformity Battle Brewing

AUGUSTA, Maine — Gov. Paul LePage has proposed the state conform to federal income tax changes approved by Congress last month at a cost of $38 million over the two-year budget cycle.

But when asked how the administration is proposing to pay for the tax cuts, Finance Commissioner Richard Rosen says he will make some suggestions, but not until lawmakers say they support the tax policy the governor is proposing.

“If the Legislature is interested in moving forward with the policy to conform,” he says. “If the Legislature is not interested in conforming, then there really is no point in having a discussion about offsets.”

That is not sitting well with some members of the Taxation Committee. Bangor Rep. Adam Goode, a Democrat that co-chairs the committee, believes a policy discussion about tax conformity needs to include how it will be paid for.

“My impression coming down today and through hearing about this bill over the course of its genesis, was that we were going to have an identified funding source from the administration,” he says. “Absent that, I feel a lot is being pushed on us unexpectedly.”

Many, but not all, in the business community testified in favor of conformity. Some of those testifying argued there are better ways to provide tax incentives that create jobs than the provisions in the governor’s bill.