“Gov. John Baldacci said Monday he would propose lowering Maine’s personal income taxes in the January session of the Maine Legislature, but how much depends on the state budget now being developed.”
– Capitol News Service, Aug. 12, 2008
Some things are predictable:
Each spring, the Maine tourism industry issues an optimistic forecast for the upcoming summer season. (“Recession? What recession?”)
Each week, New England Patriots coach Bill Belichick holds a news conference at which nothing is said. (“Porous secondary? What porous secondary?”)
Every so often, the state Department of Health and Human Services announces it’s reformed its bureaucracy and will henceforth operate at such a high level of efficiency that oxygen masks will be required. (“Failure to provide services to the mentally ill? What failure to provide services to the mentally ill? Millions in overpayments to contractors? What millions in overpayments to contractors? The Medicaid muddle? What Medicaid muddle?”)
And each year, Gov. John Baldacci announces his top priority in the next legislative session will be reducing the state income tax. (“Lack of political clout? What lack of political clout?”)
Shortly after being sworn into office in 2003, Baldacci called for gradually lowering the income tax’s top rate from 8.5 percent to something more reasonable. But when the governor introduced his first tax-reform bill, it didn’t mention the income tax. “We have been debating tax relief and tax reform for quite some time,” he said, “and I think that now is the time for action.”
He was wrong about the action – his bill failed to pass – but right about the lengthy debate. Between 1997 and 2004, there were at least six major studies of Maine’s tax structure and dozens of recommended reforms. All those studies are gathering dust. All those reforms are dead.
No worry. As the Portland Press Herald reported in November 2004, “A tough-talking Gov. John Baldacci vowed Wednesday to make tax relief his top priority for the 2005 legislative session, saying he will keep the Legislature in session as long as it takes to get the job done.”
The guv had a brand new tax measure. Once again, it didn’t include any changes in the income tax. But it did meddle with the property tax, and it eventually passed. Baldacci hailed the bill, labeled L.D. 1, as “bold, historic, comprehensive.” Four years later, the general assessment seems to be “insignificant,” although there’s an argument to made for “irrelevant.”
After that victory, Baldacci first said income-tax reform would have to wait. Then, he decided it wouldn’t have to wait. “We’ve got to get rid of the albatross on Maine’s back, which is this tax burden,” he said, apparently unaware the Ancient Mariner wore his albatross in front. More of a conversation piece that way.
In April 2005, the governor announced his income-tax reform package.
It lowered the top rate from 8.5 percent to … 8.45 percent.
It reduced the income-tax burden by 12 percent … over 10 years.
It … oh, never mind.
In the meantime, legislators had come up with their own plan for a 6-percent flat tax, paid for by expanding the sales tax to exempt items, while lowering the rate from 5 to 4 percent. Baldacci said no. The Legislature, in turn, wanted nothing to do with his scheme. Tax reform, as usual, croaked.
The governor promised to call a special session to deal with the issue.
“I’m committed to working on tax reform,” he said.
Instead, the focus shifted in 2006 to a citizen-initiated measure called the Taxpayers’ Bill of Rights (TABOR), which would have capped state spending and used any surplus funds to reduce the income tax. It lost at the polls, but by a narrow enough margin to scare elected officials. As a Press Herald headline put it, “Lawmakers: Yes, we got the message – cut taxes.”
As the 2007 session began, Baldacci was strangely silent, while legislators hammered out yet another plan to cut the income tax and expand the sales tax. But just two weeks before adjournment, the governor finally spoke. He wanted “significant changes.” Too bad he hadn’t mentioned that a little earlier. The income tax remained unmolested.
Baldacci then told reporters he’d have a plan to cap spending and cut the income tax (wasn’t that what TABOR would have done?) in time for the 2008 session. Must have been printed in invisible ink.
This year, a study committee did propose reducing the top rate to 4.5 percent and paying for it with budget cuts. Even though this was exactly what the governor said he wanted, he never endorsed the idea, and it suffered a lonely death.
Now we’re all looking forward to 2009. And right on schedule, here comes our boy.
From the Aug. 13 Morning Sentinel: “Gov. John Baldacci said this week that lowering the state income tax is a priority heading into the next legislative session.”
Don’t spend your refund just yet.
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