The Universal Notebook: LePage’s tax plan is DOA

  • Mail this page!
  • Delicious
  • 0

During his first term, Gov. Paul LePage got many of his ideas from the ultraconservative American Legislative Exchange Council and Maine Heritage Policy Center.

In his second term, his tax plan comes from an unexpected source: the Maine Democratic Party. The plan is to cut the income tax and broaden the sales tax. That’s the same plan Republicans opposed and fought to have repealed by referendum in 2009.

Yes, it’s confusing, but it sure is refreshing to have a Republican governor proposing to raise taxes for a change. In fact, LePage may be turning into a tax-and-spend Democrat right before our eyes.

When John Fitzsimmons, president of the Maine Community College System, expressed concerns about the state only paying half the cost of LePage’s pet project – The Bridge Year Program, through which fifth-year high school students can earn 30 college credit for free – LePage demanded and got his resignation by threatening that community college trustees would “feel the wrath” if Fitzsimmons didn’t leave. I guess that’s why they call it the bully pulpit.

Now LePage’s Bridge Year is starting to sound like a warm-up act for President Obama’s American College Promise of two years of free community college for everyone. The difference? Obama’s scheme is more generous and he plans to pay for it by raising taxes.

LePage, ever the partisan, opposes the American College Promise, because the federal government will only pay 75 percent of the cost. So if he proposes a free year of college and only pays 50 percent, it’s a great idea, but if Obama proposes two free years of college and pays 75 percent it’s what the governor called a “sucker play.”

Colleges – along with hospitals, land trusts and just about every other sizable nonprofit organization in Maine – are keeping a wary eye on the governor, who, in addition to raising and expanding the sales tax, has proposed paying for cuts in the income and inheritance taxes (both of which benefit the rich disproportionately) by – drum roll, please – allowing towns and cities to tax nonprofits.

Now there’s a lousy idea. If LePage’s tax plan is not DOA, it is among the walking dead.

The bright idea of taxing nonprofits was floated by Republicans back in 2013, when LePage cut revenue sharing to municipalities. It was such a radical proposal that a task force was detailed to study it.

In January, 2014, the Final Report of the Nonprofit Tax Review Task Force unanimously reached the conclusion that a statewide tax on nonprofits was “neither a feasible nor desirable recommendation.” What the task force, chaired by Sawin Millet, who was LePage’s commissioner of administrative and financial services, suggested instead was that any plan to tax nonprofits be limited to “locally applied (actual cost) service charges.”

Payments in lieu of taxes, or PILOTs, are nothing new. Some nonprofits already contribute to municipal coffers. But the three members of the Nonprofit Tax Review Task Force who represented nonprofits dissented even from the service charge suggestion, stating, “Nonprofits earn their tax exemptions every day by contributing to the common good in partnership with their host communities, county, state and federal governments.”

There is a reason we grant tax-exempt nonprofit status to some institutions. A civilized society recognizes values beyond the monetary, values such as cultural and educational benefits, public health, land conservation and historic preservation. I’m not convinced some conservatives recognize non-monetary values. Invoke “the common good” to some on the far right and you will be labelled a socialist.

LePage made the state’s hospitals happy when he paid the state’s debt to them, but they are not happy that he has refused a million dollars a day in federal aid to expand Medicaid and they sure aren’t pleased by his proposal to let cities and towns tax them. In fact, I can’t imagine why anyone other than a rich miser with no community or civic involvements would support LePage’s tax plan.

LePage has claimed a mandate by virtue of a 29,000-vote margin in an election in which 616,000 votes were cast. I bet even some of his supporters are surprised now that he thinks they gave him a mandate to raise taxes and tax nonprofits. This is what happens when a governor only talks to flunkies and yes men.

Sidebar Elements

Freelance journalist Edgar Allen Beem lives in Brunswick. The Universal Notebook is his personal, weekly look at the world around him.