Legislation to bring Maine’s tax policies in line with federal law was supposed to be adopted this week in Augusta. But lawmakers have gone home until next Tuesday with no movement on the issue.
More than 100,000 Mainers are waiting to find out if the Legislature will bring Maine’s income tax polices into line with changes made by Congress in December so they can file their taxes. The changes include a deduction for teachers who buy school supplies out of pocket, and business tax breaks that are designed as an incentive for job creation.
But there have been no votes on tax conformity, and in a surprise move the Democrat-led House has decided to adjourn until next Tuesday.
“We just got to get on the horn and get people to tell them to get back to work,” says Gov. Paul LePage. “This is just unbelievable.”
LePage proposed the state follow the federal lead and is upset at Democrats for blocking its passage.
“For the first time in decades the federal government is giving us some permanent tax cuts and the Democrats, in Maine, don’t want to give it back to the Maine people,” he says.
House Republican Leader Ken Fredette of Newport says he expected lawmakers to debate the legislation, and at least give initial approval. He was surprised at the sudden adjournment.
“We have a couple of bills that have been reported out of committee,” he says. “We are prepared to do full conformity with the federal budget that was passed and signed into law by the Democratic President Barack Obama, and we simply want to conform so that we can continue to have business make investments in Maine and grow jobs in Maine.”
But House Majority Leader Jeff McCabe, a Democrat from Skowhegan, says other spending issues are worrying Democrats in the House. He says the list of spending requests from the governor continue to grow — from pay raises for state law enforcement personnel to the costs associated with a response to the state’s drug crisis.
McCabe says the recent news that school subsidies will be about $23 million less than originally thought, and the expected $38 million price tag for Maine adopting all of the federal income tax changes, have his caucus members worried.
“I think we have to have a spending discussion,” he says. “I think in the short term you know we have the ability to pass a bill that would allow us to conform and people could file their taxes and we could have done that last week.”
McCabe says his caucus is also expressing doubts about the effectiveness of some of the tax breaks passed by Congress. He says the Legislature should defer and decisions on tax conformity for 2016, and pass legislation aimed only at the 2015 tax year.
“As we move forward, anything that we do actually generates jobs for Mainers,” McCabe says. “You know, we are not just about passing tax breaks that aren’t going to create jobs.”
Expect to hear a lot more about the tax impasse in the days ahead as tax policy has become entwined with other spending debates, including the one around school funding.
