Target Rich Environment: Off the chart

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Back in 2006 the liberal Brookings Institution published Charting Maine’s Future with a portfolio of economic development recommendations. Governor Baldacci welcomed it as a “blueprint for Maine’s future” and all the legislators received copies. The loud “buzz” it set off at the time, seems to have subsided at present to a low hum inaudible to my aging ears.

John Frary

Yet the report’s effect lingers on. It pointed out that our state deserves the name “Administrationland” as much as “Vacationland,” proposing energetic efforts to reduce our overgrown governmental structure. While the hordes of officials in Augusta remain undiminished, the school consolidation and jail centralization legislation appear to be inspired by its analysis. Few people believe there will be savings any time soon from the first. The effects of the second remain uncertain.

The Democratic majority appears to have embodied the Brookings proposal to reduce the state’s income tax rates in the new “tax reform,” LD 1495. We should be pleased to see them agreeing with the Maine Heritage Policy Center, after years of denial, that our tax rates are a drag on economic development. Yet this legislation ignores a crucial part of the Charting Maine’s Future.

While it’s true that the “blueprint” advocated a reduction in the top income tax rate, it proposed that this tax cut be funded through savings identified by a Government Efficiency Commission composed of 12 independent minded citizens. No such commission was ever established. No such savings were ever identified. Worse, the Democrats toyed for a while with saving money by abolishing the Office of Program Evaluation and Government Accountability (OPEGA) even though the report proposed that this organization could help the commission identify waste and misappropriation.

LD 1495, instead of reducing excess expenditure, aims to fund tax cuts on the highest earners by extracting revenue from the lowest. This is to be done by “broadening” the sales tax to include all kinds of services. Of course, we are assured that most of this burden will fall on tourists, transients, extraterrestrials, interlopers and flatlanders. Taxation without representation, a perennial favorite of politicians down through the ages. When it works, it works really well.

Mind you, I have no principled objections to soaking flatlanders. Not since I escaped from my New Jersey exile and re-rooted myself in the sacred soil of my native state. But is this claim really true? We must wonder about the Maine Revenue Service’s (MRS) calculations when we read that LD 1495 proposes to tax… ventriloquists. Does it really know how many ventriloquists there are in the state of Maine? Do you? Does anyone? I’m consumed with curiosity about its revenue projections from ventiriloquy – $5,000, $240, $25, 75 cents – but the figures are nowhere to be found.

The claim that the increase in the meals and lodgings tax from 7 percent to 8.5 percent shifts the burden from Mainers to rusticators from away is more intelligible, but very questionable. Mainers pay 80 percent of this tax. Notice, Burger King and MacDonald’s are year-round businesses. No burden on the citizens of Fryeburg, of course. They can readily slip across the border into New Hampshire for a little R&R and a Double-Lalapalooza with fries. Good for them. Not so good for the people in Bangor or Benedicta.

It all comes down to this. Faced with a proposal to reduce taxes by reducing spending, the Democrats turn to tax increases as a compass needle turns to the north, and a heliotropic flower turns to the sun.

Paraphrasing the banditos in “The Treasure of the Sierra Madre” they snarl “Efficiencies, we don’t need no stinkin’ efficiencies” and turn their fertile minds to devising new ways to soak Maine’s taxpayers. So it has been for over 30 years, and so it will continue until the sun cools.

No point in protesting that the Legislature just cut the budget by $500 million. It was forced to do that by the state constitution and the recession. The huge infusion of federal stimulus funds made it possible and that source will not available for the next biennial deficit, estimated by optimists as $500 million, by pessimists as $1.5 billion. Either way, we can be sure that the majority party’s solution will be furth er “broadening” of the sales taxes. They don’t know any other way.

The Republican party is now circulating People’s Veto petitions to annul LD 1485, squelch the new sales taxes, head off further increases and force a serious program of budget restraint. Sign or suffer. The choice in your hands.

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