AUGUSTA, Maine — For years, Maine has followed the lead of the federal government on income tax policy, even when changes in the tax code cost the state in lost revenues. This year, thousands of Mainers may have to wait weeks, or longer, to file their 2015 tax returns because of an impasse between Gov. Paul LePage and Democrats on the Legislature’s Taxation Committee.
As he has for the last four years, LePage has proposed that Maine conform to federal tax law by adopting income tax changes made by Congress.
Members of the taxation committee held a public hearing on the measure, and tax filing for 2015 has already started. But the bill is now hung up in committee.
Democrats tabled action on the bill until next week because they want to know how the governor proposes to pay for the $38 million package.
“We are between a rock and a hard place,” says Bangor Rep. Adam Goode, a Democrat who co-chairs the committee. “Myself and every Democrat was at the table and we were on mic and we’re ready to go on mic again to talk about the funding sources.”
He says Democrats are not comfortable supporting the tax changes without knowing what areas of state spending the governor would cut to pay for the tax reductions, which mostly affect businesses.
LePage says the current budget was passed over his objections, and so the Legislature should come up with cuts in the spending that they approved.
“I’m not putting any energy into anything that does not have a meaningful end to it,” LePage says. “All they got to do is say, ‘Yes we are interested, let’s go do it,’ I’m all in. If they’re going to say, ‘You tell us where we are going to do it before we do it,’ I’m not in.”
LePage says he has already shared with legislative leaders some of the budget cuts that he would propose as funding sources for the tax bill. He says the Taxation Committee should approve the policy and leave it up to the Appropriations Committee to craft a funding package.
LePage and Goode both say that affected taxpayers, including many small-business owners and professionals, should be able to file their taxes, but that can’t happen until some sort of compromise is reached at the State House.
