Eye on Augusta: LePage Receives Merit Badge from Corporate Lobbyist Group
Thursday, August 18, 2016 9:50 AM
This week, Gov. Paul LePage took to the airwaves to proudly proclaim that the American Legislative Exchange Council (ALEC), a right-wing corporate lobbying group, listed his 2016 “State of the State” address as one of the best in the country for the economic policies it laid out. (That’s the address that Gov. LePage refused to deliver in person to a joint session of the Legislature; instead, he sent a letter to the Maine State Legislature on February 8, decrying what he termed “efforts by Maine socialists to turn our state into Greece, Cuba, Venezuela or the former Soviet Union.”) The tax-exempt group praised the governor for his efforts to abolish the income tax as well as taxes on multimillion-dollar inheritances.
“I’m pleased to be recognized by the nation’s foremost experts on tax policy for having one of the best economic proposals in the country,” said LePage in a press release. “Socialists in the Legislature and the Maine media continue to resist my common-sense economic proposals that have propelled other states into growth and prosperity. But I will keep fighting to bring fiscal responsibility to state government and to give Maine people and companies the opportunity to thrive and prosper.”
In its report, ALEC argued that getting rid of income taxes and the estate tax would improve the state’s “economic competitiveness” and could turn Maine into a “refuge for taxpayers, businesses and capital fleeing the poor tax and fiscal policies adopted by most Northeast states.” The organization singled LePage out as the only governor in the country who proposed eliminating the income tax.
“Governor Paul LePage delivered one of the most meaningful addresses in terms of tax policy,” ALEC stated.
Although relatively unknown outside political circles, ALEC has long been an avenue for corporations to deliver their wish lists to right-wing state legislators. ALEC’s board of directors is made up of 26 Republicans, including Maine State Senator Andre Cushing (R-Hampden), and is funded and advised by the drug industry, oil corporations, tobacco companies, a for-profit charter school, alcohol lobbyists and the billionaire brothers Charles and David Koch. The group generally writes bills for state lawmakers that focus on cutting taxes for the wealthy and corporations, privatizing schools, reducing environmental and labor protections and opposing gun-control measures.
In 2012, several major corporations and donors cut their ties with ALEC after it was revealed that Florida’s “Stand Your Ground Law,” which allowed George Zimmerman to legally murder unarmed black teenager Trayvon Martin, inspired ALEC model legislation. Last year, LePage submitted the ALEC-inspired bill LD 1361, sponsored by Cushing, which would have overridden a municipality’s right to enact minimum-wage ordinances.
In 2013, the liberal-leaning Center for Media and Democracy reported that Senate President Mike Thibodeau (R-Waldo County) was a member of ALEC’s Communications and Technology Task Force. ALEC allowed corporations to join the task force for a $5,000 fee, according to a 2011 brochure. Former Rep. Ryan Harmon (R-Palermo), who is running for the Legislature in House District 96, was, during his previous term in office, a member of ALEC’s Fiscal Policy Task Force, which required a $3,000 fee for corporate members.
In 2014, Thibodeau told The Free Press that he had ended his membership in ALEC because he didn’t want to travel to the meetings anymore. However, Thibodeau and the rest of Maine’s Republican leadership did sign on to LePage’s initiative to eliminate the income tax, which ALEC praised in its report. Currently, Maine’s income tax brings in about $1.7 billion in revenue, or more than one-third of the state budget. Property taxes generate 45 percent and sales taxes bring in 22 percent. So how would the state make up for the $1.7 billion in foregone revenue without draconian service cuts or dramatically raising property and sales taxes? Fortunately, the results of a “real live experiment” in ALEC tax policy are available.
In 2012, Kansas Governor Sam Brownback, with the help of supply-side economist Arthur Laffer, who is also on ALEC’s “Board of Scholars,” tried a similar, though less radical, tax experiment. As the Wall Street Journal reports, the Kansas Legislature reduced the top income tax by 25 percent and eliminated taxes on some businesses. The move was promoted as a way to jump-start the economy and attract business investment from other low-income-tax states. Instead, it resulted in ballooning deficits and a massive shift in the tax burden to sales and property taxes. Kansas was also forced to withhold $260 million from public schools in order to fund roads and balance the budget. Earlier this month, Kansas Republican primary voters signaled that they were fed up with tea party economics when they ousted the Senate Majority Leader along with 13 of Brownback’s conservative allies and replaced them with more moderate representatives. Some Maine Republican lawmakers appear unwilling to heed the lessons of the Kansas experiment, which offers a real taste of what’s to come if they win enough seats this November to pass LePage’s ALEC-endorsed agenda.