Eye on Augusta: Biennial Budget Hearings on Tax Cuts Begin Next Week
Thursday, February 02, 2017 11:23 AM
Governor’s Proposed New Sales Taxes
Household services: Interior home decorating, painting, design services, cleaning and organizing services; Property maintenance services including exterior home cleaning and maintenance, snow plowing or removal, and cleaning and maintenance of windows, drains, gutters, chimneys, swimming pools, and hot tubs; Landscaping and horticultural services, including gardening, garden design, lawn care services, tree trimming and tree removal; Insect and pest control services; Home automation services, including home electronic services and audio-visual design and installation services; Locksmithing, alarm services, and home security services and monitoring systems services, including design, installation, servicing and repair; Private waste management services and remediation services; Domestic staffing services, including those provided by cooks, maids, butlers, gardeners and caretakers.
Installation, repair and maintenance services: all services involved in the installation, repair and maintenance of tangible personal property other than motor vehicles, watercraft and aircraft.
Personal services: All services provided by barber shops, hair salons, nail salons, tanning salons, massage parlors, spas, and body piercing and tattoo parlors, including manicure and pedicure services, airbrushing, fills, full sets, nail sculpting, paraffin treatments, polishes, body waxing and wraps, peels, scrubs and facials; Event planning services, including all services related to weddings and commitment ceremonies; Dating, escort and social introduction services; Diet and nonmedical weight-reducing services; Personal delivery services; Travel arrangement and reservation services; Psychic reading, tarot card reading, astrology, reflexology, and palm reading services.
Personal property services: Dry cleaning, laundry and diaper services, not including self-service laundry services; Embroidery, monogramming, silk screening and clothing alterations; Vehicle cleaning and detailing services; Pressure cleaning and washing; Pet services including exercising, sitting, training, grooming and boarding; Mounting and framing services; Furniture and rug cleaning; Stripping and reupholstering of furniture; Restoration services, including art restoration and conservation services and photographic restoration services; Warehousing and storage fees, including rental of storage units, warehouse space, watercraft slips and watercraft mooring space; Motor vehicle parking and garaging services provided on a contractual, hourly, or other periodic basis; Moving services, including packing and crating; and vehicle towing.
Recreation and amusement services: Admission fees for museums, planetariums, theaters, concerts, festivals, amusement parks, water parks, theme parks, miniature golf courses, go-cart or bumper car courses, fairs, race tracks, carnivals, circuses, games, stadiums, convention centers, bars, comedy clubs, animal parks, petting zoos, and aquariums. Admission to recreational activities such as sports, games, golf, swimming, skiing, skating, tennis and other racket sports, billiards, shooting, archery, disc golf, laser tag, bowling, paintball, horseback riding, guided hunting and fishing, ballooning, hang gliding, sky diving, paragliding and parasailing, bungee jumping and zip lining, and scuba diving, snorkeling, and other water sports. Admission to shows or exhibitions including animal, antique, arts and crafts, auto, book, boat, camping, collectibles, flower, garden, home, and trade shows. Membership in a club, association, or other organization if the club, association, or other organization makes sports, athletic, or fitness facilities of any kind available for the use of its members.
Miscellaneous: online real property rental platforms, such as Netflix, vending machine items, rental of living quarters, and the rental of motor vehicles.
Next week, the Legislature’s Appropriations Committee will hold three days of public hearings on Gov. Paul LePage’s so-called “do no harm” budget. On February 6, 7, 9 and 10, the committee will specifically look at the governor’s plan to slash income taxes and expand sales taxes along with several other tax-related initiatives.
“This budget is about ‘do no harm,’” the governor announced in a radio appearance on January 12. “Do no harm to the state economy and do no harm to the elderly.”
The 2018-2019 biennial budget would dramatically cut income taxes by reducing the number of tax brackets from three to two, with a lower rate of 5.75 and a top rate of 6.15 percent. After two years, the plan would drop the top rate even further to create a flat 5.75-percent tax rate for all income earners in 2020. The proposal would also override the will of the voters, who voted in November to levy a 3-percent tax on household incomes over $200,000, by instead tacking a 3-percent tax onto the flat 2.75 percent tax for all earners. The governor’s budget would also reduce the top corporate income tax rate from 8.93 percent to 8.33 percent and eliminate the estate tax, which applies to inheritances worth over $5.45 million. It would also incrementally increase the tax exemptions on non-military pensions from $10,000 to $35,000 per year.
In addition, the budget proposal would expand the 5.5 percent sales tax to “discretionary” items such as amusements and recreation; household services; installation, repair and maintenance services; personal services; and personal property services (see complete list below). The plan would also increase the lodging tax from 9 percent to 10 percent and eliminate the homestead tax exemption for people under 65 years of age and expand the exemption to permanent residents over 65 from $15,000 of a home’s assessed value to $20,000.
“I absolutely agree that an income tax is not fair. In fact, I tried to eliminate it,” said LePage in a January 17 radio appearance. “Unfortunately, there’s 186 people upstairs that disagree with me. So I’m trying to do the best I can with lowering the income tax and to try to teach them that an income tax is very regressive and it damages the economy.”
But while the governor has insisted that the budget is aimed at helping the elderly, critics like the liberal-leaning Maine Center for Economic Policy argue that the only elderly people it will help are the ones making over $92,000 per year. According to a MECEP analysis, the plan would deliver a $240 tax cut to households earning between $92,000 and $170,000; a $1,590 tax cut for those earning between $170,000 and $384,000; and a $22,665 tax cut for households earning over $384,000. On the other hand, MECEP estimates that households earning less than $22,000 would see a $60-a-year tax increase, households between $22,000 and $37,000 would be hit with a $110 increase, households between $37,000 and $59,000 would see a $90-per-year tax increase and households between $59,000 and $92,000 would see an $85-per-year increase.
“Not only does the governor’s lopsided tax proposal increase taxes for the vast majority of Mainers, it drastically reduces the amount of resources available to invest in the foundations of a thriving economy,” wrote MECEP policy analyst Sarah Austin. “The governor’s proposal cuts services communities rely on and pushes costs for education and other services onto cities and towns just two months after Mainers approved more state funding for education paid for by a tax on wealthy households.”
The remaining portions of the biennial budget — which include kicking thousands of low-income Mainers off of Medicaid, eliminating the General Assistance program for impoverished Mainers, severely restricting access to assistance for low-income families, getting rid of 500 state employee positions and eliminating state funding for school administration among several other education-related initiatives — will be heard between February 13 and March 8. For a full list of budget hearings, dates and times and to listen to hearings online visit: http://legislature.maine.gov/committee/#Committees/AFA.
Hearings for the Week of February 6 —
The Crime Bills
Next week, the Criminal Justice Committee will be busy with law enforcement-related bills sponsored by retired sheriff’s deputy Sen. Scott Cyrway (R-Kennebec Cty.). On Monday, February 6, the committee will hear LD 92, which would require that anyone who provides illegal drugs to another person that cause “serious or life-threatening medical distress” must provide first aid and assistance to the victim and call a medical professional, first responder or law enforcement officer. Anyone who administers first aid would not be civilly liable for damages or death of the susbtance user unless it is done in a “grossly negligent manner.” However, the measure would not waive criminal liability, and violation of Cyrway’s proposal would result in a Class C crime, punishable by up to 5 years’ incarceration and a $5,000 fine. Under current Maine law, people who report an overdose can use it as a defense against prosecution, but the law does not provide immunity from arrest and prosecution if a drug user calls for emergency assistance in the event of a drug overdose.
The committee will also hear another Cyrway proposal, LD 94, which would require that funds generated from the sale of forfeited firearms at auction be used to fund educational programs taught by law enforcement officers that target “prevention of substance abuse, violence or high-risk behavior.” Cyrway is a former state coordinator for the Drug Abuse Resistance Education (D.A.R.E.) program and has long advocated for increased funding for the program.
On the same day, Cyrway will present LD 102, which would require courts to impose fines for people convicted of crimes that are an equal amount to the costs of investigation and prosecution of their crimes. The committee will also hear LD 138, also sponsored by Cyrway, which would require teachers who are convicted of sex crimes to register on the state’s sex offender registry.
On the same day, Rep. Beth O’Connor (R-Berwick) will also present LD 18, which would make it a crime of assault on a law enforcement officer if the person “intentionally, knowingly or recklessly exposes a law enforcement officer to any substance in a manner that could temporarily disable, disorient, impair the sight of or impair the breathing of the law enforcement officer.” Violation would result in a class C crime, punishable by up to 5 years’ incarceration and a $5,000 fine. Finally, the Criminal Justice Committee will hear LD 54, sponsored by Rep. Ralph Tucker (D-Brunswick), which provides a supplemental benefit for corrections officers who are injured by patients or prisoners in a jail, prison or state correctional facility.
Styrofoam Ban Bill Gets a Hearing
Rep. Stanley Paige Zeigler (D-Montville) will present LD 103, which would ban the use of disposable Styrofoam food service containers, to the Environment and Natural Resources Committee on February 6. The bill is part of an effort to keep the non-biodegradable packaging from getting into the environment and to cut down on garbage displosal costs. However, the LePage administration has opposed the bill in the past due to the cost of implementing and enforcing the law.
Antlerless Deer Permits for Seniors & Island Culling
On February 7, Inland Fisheries and Wildlife Committee will hear a measure to allow anyone 70 years of age and older to take an antlerless deer during the open season on deer. The bill, LD 60, sponsored by Rep. Russell Black (R-Wilton) would direct the Department of Inland Fisheries and Wildlife to designate which hunting zones are open to the taking of antlerless deer. The committee will also hear LD 110, sponsored by Rep. Robert Alley (D-Beals), which is a concept bill proposing to “address the problem of excess populations of deer in island and coastal communities.” Island communities in particular have often complained that deer can overrun islands due to a lack of predators. Last year, the Maine Inland Fisheries and Wildlife Advisory Council authorized a limited doe-only hunt for two weeks in order to help cull some of the Downeast herd.
Mandatory Cytomegalovirus Testing
Cytomegalovirus is a common condition that affects people of all ages, including half of adults over 40, according to the Centers for Disease Control. The CDC notes that most who are infected with the virus show no signs or symptoms, but it can cause serious health problems for people with weakened immune systems and for babies. LD 87, sponsored by Sen. Cathy Breen (D-Cumberland Cty.), would require newborn infants to be tested for cytomegalovirus no later than 21 days after birth. The bill, which will be heard by the Health and Human Services Committee, would also require the Department of Health and Human Services to develop public educational materials regarding the disease.
The committee will also hear LD 20, sponsored by Rep. Richard Malaby (R-Hancock), which would appropriate over $3.2 million to reimburse nursing homes. Nursing homes have long complained that their reimbursements from MaineCare are not high enough to keep them in business. HHS will also hear a measure, sponsored by Sen. Eric Brakey (R-Androscoggin Cty.), to allow tobacco stores to be licensed as a cigar lounge that can serve alcohol.
“Do Not Resuscitate” Bill
On February 9, the Judiciary Committee will hear LD 125, sponsored by Rep. Beth Turner (R-Burlington), which would prohibit emergency responders from resuscitating anyone who has an indelible “do not resuscitate” mark on his/her chest.
Tinted Glass Repeal & Another Helmet Law Bill
Maine once had a motorcycle helmet law, in the late 1960s and ’70s, but it was repealed in 1977. Over the years, lawmakers have unsuccessfully attempted to reinstate the law several times but every time bikers have flooded the State House with the rallying cry, “Let those who ride decide!” On February 9, the Transportation Committee will once again hear a measure, LD 118, sponsored by Rep. Martin Grohman (D-Biddeford), that would require people under 18 years of age to wear a helmet on a motorcycle or moped. The same day the committee will hear LD 1, sponsored by Assistant House Republican Leader Ellie Espling, that would repeal the law that bans reflective material or tinting on car windows. Finally, Sen. Scott Cyrway will present the committee with LD 137, which would prohibit people from operating cars with snow or ice on the front windshield or side mirror that obstructs the driver’s view. A violation would result in a $175 fine.