AUGUSTA - A bill sponsored by Rep. Jan Dodge, D-Belfast, to ensure that public workers pay the same income tax as other retirees, received unanimous support from the Maine House of Representatives Wednesday.
LD 1227 aims to solve an important problem within Maine's tax code: unequal treatment of Social Security income and pensions for retired workers. Under current law, Maine state income tax is not assessed on Social Security income but is assessed on income from the Maine Public Employee Retirement System, or MainePERS.
The measure would create a deduction to exempt MainePERS benefits from the state income tax and scales that deduction to mirror the benefits current retirees with Social Security benefits receive. The bill corrects for this difference by gradually increasing the amount of MainePERS income that is tax-free over five years.
"This bill is long overdue. We must demonstrate to the people who perform public service that we value their commitment to our communities," said Dodge. "These are public servants who had their Cost-of-Living Adjustments cut to balance state budgets and who had their pensions reduced through increased insurance costs. These are folks who fix our roads, educate our children and keep us safe. I am grateful to have my colleagues' support and I hope members of the Appropriations and Financial Affairs Committee will join in this support so that we can finally restore some financial stability for those who work so hard for our state."
The bill also creates parity with Social Security benefits by reducing the $10,000 pension deduction for each dollar of deducted MainePERS income the same way that Social Security beneficiaries are required to reduce their deduction for each dollar of untaxed Social Security income.
Dodge is serving her second term in the Maine House and serves on the Education and Cultural Affairs Committee. She represents the towns of Belfast, Northport and Waldo.
Contact:
Jackie Merrill [Dodge] c. 812-1111