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For Immediate Release

Date: 05/29/13

Democrats Propose Largest Tax Hike in Maine History

Continue unsustainable path of raising taxes to accommodate DHHS expansion

AUGUSTA - Democrats Wednesday unveiled a plan to raise taxes by over $400 million in the upcoming budget in order to cancel spending reductions that came about as a result of an ever-expanding state welfare agency. If successful, the Democrats would reduce the size of the return of a family of four earning $50,000 by $300 next year.

"Maine is at a fork in the road," said House Republican Leader Ken Fredette of Newport. "We can choose a sustainable government, or we can choose a government that taxes its citizens more and more to feed a bigger, more intrusive, and more wasteful state government than ever. Democrats have chosen the latter with the biggest tax increase in Maine's history."

In addition to rolling back the bipartisan income tax cuts passed in 2011 which disproportionately benefit the middle class and have already gone into effect, Democrats are proposing regressive tax increases to the sales tax, meals tax, tobacco tax, and others.

"We come back year after year to ever-increasing costs at DHHS, the state's welfare agency, to the point where DHHS is crowding out funding for local aid and education, and the Democrats' solution is to raise taxes and expand DHHS," said Assistant House Republican Leader Alexander Willette of Mapleton. "Democrats are using the paychecks of working Mainers to double down on the welfare state."

Rep. Fredette added that if Democrats are so opposed to lower taxes, they shouldn't have voted in favor of them two years ago. "We are at this point because Democrats have doubled the size of MaineCare and DHHS, and every year we must choose between lower taxes and more welfare, and every year, Democrats choose more welfare," he said. "The Democrats' announcement of the largest tax hike proposal in Maine history exposes the problem of unsustainable state government. We decided to reverse this trend in the last budget, but now that Democrats are back in power, they're up to their old tricks."

BUDGET QUICK FACTS

MaineCare's share of the state budget has doubled in the past 15 years, from 13 to 25 percent.

DHHS spending has increased 70 percent in the past decade, and now consumes 47 percent of the state budget.

Local government taxing has increased even faster than state government spending𤹓 percent versus 89 percent over the past 20 years—and has nearly doubled the rate of inflation.

Revenue sharing accounts for only 2-3 percent of the budgets of the top 10 municipal receivers of it, and no more than seven percent of any municipality.

Maine's state and local tax burden is currently 8th highest in the nation, while its welfare spending is 2nd in the nation as a percentage of overall state spending.

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Contact:
David Sorensen
Maine House Republicans
Tel: (207) 205-7793