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Last fall the Brookings Institution, a Washington think tank, released a 150-page study assessing Maine's economy and proposing changes to cut spending and jump-start growth. Will the new legislature follow its advice? Should it?
Q: Should Maine follow the advice in the Brookings report?
Sean Faircloth
The Brookings report makes Mainers justifiably optimistic:
* Since 2000 Maine has had the highest acceleration in economic growth rate of ANY state;
* EVERY county experienced net population gains (though Maine's 2nd District saw less growth than southern Maine);
* More people are leaving New Hampshire to come to Maine than vice versa;
* Maine is closer to the national average income than ever before.
Good! Now what?
Let's cut taxes for working Mainers and attract high wage jobs.
1) Cut taxes.
For years I've believed we must cut three taxes: income tax, property tax, and the auto excise tax.These taxes pinch necessities.
In a 2003 study, Maine taxes hit hardest if you either make less than $9,000 per year, or if you make between $25,000 and $34,000. Maine's highest income tax rate, 8.5%, kicks in at a gross income of $25,500. FDR would say that's just wrong.
2) Attract high wage jobs.
Maine incomes have improved, but are still lower than the national average. To improve, Maine must invest in research and development and higher education through the community colleges and UMaine. Maine is 50th in university R & D investment. Fiftieth! We must do better - now.
The Special Research and Development Committee urges major investments in R & D. We should meet those recommendations - then raise them. Maine's R & D spending, as a percent of gross state product, is 1.1%. Why does that matter? The U.S. average is 2.5%. The New England average is 4.2%. Maine is an EPSCoR state (Experimental Program to Stimulate Competitive Research), meaning we get help from the feds because of low R & D investment. Even the average among EPSCoR states is 1.5%. The biomedical research collaboration between Jackson Lab and EMMC is one example why we must add even more to the R & D recommendation.
Brookings proposes a $200 million Innovation Jobs Fund. Bangor's chamber of commerce is right to endorse R & D bonding. With Maine's tax-supported debt at $427 per capita (versus the national average of $724), it is fiscally irresponsible if we don't make a major capital investment. Any politician who opposes this investment should be fired in '08.
3) Cut spending.
Maine has the fourth-highest rate of school administration in America, one school administrator for every 127 students (compared to a national average of 212). Brookings estimates a savings of $10 million to $35 million without closing any schools, simply by consolidating administration. We must regionalize municipal governments for the same reason.
4) Make flatlanders pay.
Brookings points out that Maine is a cheap date. "Dear New Yorker, Want a Maine hotel room? To charter a plane to buzz Mt. Desert? Take in a show?" Great! But, today, lodging, aircraft rental, chartered flights, property rental and leasing are all nontaxed items in Maine. Forty-five states collect these taxes, purchased largely by nonresidents. Mainers, have you visited Florida? New York? California? Quick: What's the lodging tax in Florida? You don't know. The lodging tax played zero role in your travel decision.
Brookings makes clear that New Yorkers, etc., will come just the same if they pay their fair share.
5) Support a Republican tax idea.
Peter Mills once proposed a soda tax. I'd throw in booze, cigs, beer, and junk food.
Because I'm against sin? Heck no. Do what you choose. But, taxing frills could lower taxes on necessities (homes, cars, and work).
Good deal!
By taking these steps, taxes will go down, high wage jobs will go up, and we'll have done something great for Maine.
Rep. Sean Faircloth is Majority Whip of the Maine House, one of two Bangor Democrats to serve in legislative leadership in the last 160 years. A member of the Maine Economic Growth Council, Faircloth created Maine's first R&D tax credit, which cut taxes for innovative businesses.
Scott K Fish
Maine's 46% support for the Taxpayer Bill of Rights, said legislators, the governor, and newspaper editors, was heard loud and clear; Governor Baldacci and the legislature had better pass real tax reform this session.
* Bar Harbor Times (11/9/06): "No more band-aid solutions, no ignoring [tax reform] . . . hoping it will go away, no smoke-and-mirror tactics . . . accomplish[ing] nothing."
* Ellsworth American (11/16/06): "[T]hose who . . . opposed TABOR would do well to recognize the need for tax reform . . . has not gone away."
Commonsense tax reform is our legislators and governor enacting policies to leave more money in taxpayer pockets without it first passing through Augusta. Yet, following post-Election Day news I'm seeing no true tax reform plans. I'm seeing the regifting of tax reform games liberals have offered for decades.
The grand model for tax reform is the Brookings report, written at the behest of southern Maine "Smart Growth" people. They want to herd rural Mainers into urban centers, leaving just enough Mainers in rural areas to fix meals, make beds, clean toilets, and plow roads for the "Smart Growth" crowd. Another word for such rural Mainers is "servants."
The Brookings report claims we can fix what's wrong with Maine with $400 million in new borrowing on the taxpayers' credit card, raising the meals-and-lodging tax to 10%, and establishing the following government entities to control it all:
Municipal Investment Trust Fund; Maine Downtown Center; Maine Community Enhancement Fund; Maine Quality Places Fund; Maine Government Efficiency Commission; Fund for the Efficient Delivery of Local and Regional Services; State School Capital Plan; School District Reorganization Committee; Fund for the Efficient Delivery of Education Services; Maine Innovation Jobs Fund; Cluster Development Fund.
The "Government Efficiency Committee"?? With a straight face? I'm to believe these people have taken to heart the message that Maine is "disgruntled with the way government spends their money"? Yet, Governor Baldacci formed his new "Council on Jobs, Innovation and the Economy" to take parts of the Brookings "Smart Growth" report for his state budget plan.
Baldacci also wants to cap the value on our homes and call it property tax relief.
Sen. Dana Dow wants to increase Maine's sales tax to pay for property tax relief. Then in 10 years Senator Dow will look at lowering the income tax.
Nothing guarantees Dow's sales tax increase will be used for property tax relief. History says otherwise. Mainers were told having a sales tax and then an income tax would lower property taxes. Ha! And Dow cannot promise lower income tax rates in 10 years in exchange for a higher sales tax today. Someone not as nice as me could say the senator is guilty of pandering to voters.
If you define tax reform as less of your money recycling through Augusta, you need to commit the next two years to fighting for that tax reform. Don't be suckered by these tax shell games.
Scott K Fish is a political analyst, writer, and owner/editor of www.asmainegoes.com, a conservative political forum that has been keeping Mainers talking since 1998.
Q: Should Maine follow the advice in the Brookings report?
Sean Faircloth
The Brookings report makes Mainers justifiably optimistic:
* Since 2000 Maine has had the highest acceleration in economic growth rate of ANY state;
* EVERY county experienced net population gains (though Maine's 2nd District saw less growth than southern Maine);
* More people are leaving New Hampshire to come to Maine than vice versa;
* Maine is closer to the national average income than ever before.
Good! Now what?
Let's cut taxes for working Mainers and attract high wage jobs.
1) Cut taxes.
For years I've believed we must cut three taxes: income tax, property tax, and the auto excise tax
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In a 2003 study, Maine taxes hit hardest if you either make less than $9,000 per year, or if you make between $25,000 and $34,000. Maine's highest income tax rate, 8.5%, kicks in at a gross income of $25,500. FDR would say that's just wrong.
2) Attract high wage jobs.
Maine incomes have improved, but are still lower than the national average. To improve, Maine must invest in research and development and higher education through the community colleges and UMaine. Maine is 50th in university R & D investment. Fiftieth! We must do better - now.
The Special Research and Development Committee urges major investments in R & D. We should meet those recommendations - then raise them. Maine's R & D spending, as a percent of gross state product, is 1.1%. Why does that matter? The U.S. average is 2.5%. The New England average is 4.2%. Maine is an EPSCoR state (Experimental Program to Stimulate Competitive Research), meaning we get help from the feds because of low R & D investment. Even the average among EPSCoR states is 1.5%. The biomedical research collaboration between Jackson Lab and EMMC is one example why we must add even more to the R & D recommendation.
Brookings proposes a $200 million Innovation Jobs Fund. Bangor's chamber of commerce is right to endorse R & D bonding. With Maine's tax-supported debt at $427 per capita (versus the national average of $724), it is fiscally irresponsible if we don't make a major capital investment. Any politician who opposes this investment should be fired in '08.
3) Cut spending.
Maine has the fourth-highest rate of school administration in America, one school administrator for every 127 students (compared to a national average of 212). Brookings estimates a savings of $10 million to $35 million without closing any schools, simply by consolidating administration. We must regionalize municipal governments for the same reason.
4) Make flatlanders pay.
Brookings points out that Maine is a cheap date. "Dear New Yorker, Want a Maine hotel room? To charter a plane to buzz Mt. Desert? Take in a show?" Great! But, today, lodging, aircraft rental, chartered flights, property rental and leasing are all nontaxed items in Maine. Forty-five states collect these taxes, purchased largely by nonresidents. Mainers, have you visited Florida? New York? California? Quick: What's the lodging tax in Florida? You don't know. The lodging tax played zero role in your travel decision.
Brookings makes clear that New Yorkers, etc., will come just the same if they pay their fair share.
5) Support a Republican tax idea.
Peter Mills once proposed a soda tax. I'd throw in booze, cigs, beer, and junk food.
Because I'm against sin? Heck no. Do what you choose. But, taxing frills could lower taxes on necessities (homes, cars, and work).
Good deal!
By taking these steps, taxes will go down, high wage jobs will go up, and we'll have done something great for Maine.
Rep. Sean Faircloth is Majority Whip of the Maine House, one of two Bangor Democrats to serve in legislative leadership in the last 160 years. A member of the Maine Economic Growth Council, Faircloth created Maine's first R&D tax credit, which cut taxes for innovative businesses.
Scott K Fish
Maine's 46% support for the Taxpayer Bill of Rights, said legislators, the governor, and newspaper editors, was heard loud and clear; Governor Baldacci and the legislature had better pass real tax reform this session.
* Bar Harbor Times (11/9/06): "No more band-aid solutions, no ignoring [tax reform] . . . hoping it will go away, no smoke-and-mirror tactics . . . accomplish[ing] nothing."
* Ellsworth American (11/16/06): "[T]hose who . . . opposed TABOR would do well to recognize the need for tax reform . . . has not gone away."
Commonsense tax reform is our legislators and governor enacting policies to leave more money in taxpayer pockets without it first passing through Augusta. Yet, following post-Election Day news I'm seeing no true tax reform plans. I'm seeing the regifting of tax reform games liberals have offered for decades.
The grand model for tax reform is the Brookings report, written at the behest of southern Maine "Smart Growth" people. They want to herd rural Mainers into urban centers, leaving just enough Mainers in rural areas to fix meals, make beds, clean toilets, and plow roads for the "Smart Growth" crowd. Another word for such rural Mainers is "servants."
The Brookings report claims we can fix what's wrong with Maine with $400 million in new borrowing on the taxpayers' credit card, raising the meals-and-lodging tax to 10%, and establishing the following government entities to control it all:
Municipal Investment Trust Fund; Maine Downtown Center; Maine Community Enhancement Fund; Maine Quality Places Fund; Maine Government Efficiency Commission; Fund for the Efficient Delivery of Local and Regional Services; State School Capital Plan; School District Reorganization Committee; Fund for the Efficient Delivery of Education Services; Maine Innovation Jobs Fund; Cluster Development Fund.
The "Government Efficiency Committee"?? With a straight face? I'm to believe these people have taken to heart the message that Maine is "disgruntled with the way government spends their money"? Yet, Governor Baldacci formed his new "Council on Jobs, Innovation and the Economy" to take parts of the Brookings "Smart Growth" report for his state budget plan.
Baldacci also wants to cap the value on our homes and call it property tax relief.
Sen. Dana Dow wants to increase Maine's sales tax to pay for property tax relief. Then in 10 years Senator Dow will look at lowering the income tax.
Nothing guarantees Dow's sales tax increase will be used for property tax relief. History says otherwise. Mainers were told having a sales tax and then an income tax would lower property taxes. Ha! And Dow cannot promise lower income tax rates in 10 years in exchange for a higher sales tax today. Someone not as nice as me could say the senator is guilty of pandering to voters.
If you define tax reform as less of your money recycling through Augusta, you need to commit the next two years to fighting for that tax reform. Don't be suckered by these tax shell games.
Scott K Fish is a political analyst, writer, and owner/editor of www.asmainegoes.com, a conservative political forum that has been keeping Mainers talking since 1998.
