Tax Relief Must Be Part of the Conversation!

By Rep. John “Jack” Ducharme

The State of Maine has a balanced budget amendment to the Maine Constitution.  This requires that projected receipts of revenue and expenditures be balanced.  That means if the State receives $100 in revenue, it must account for that revenue with an offsetting expense.  While many view the balanced budget amendment as a means of controlling State spending, in times of increasing revenues it can be an easy vehicle to use to grow government.  The current administration and Democratic majority in the Legislature are taking full advantage of this.  State budgets are created based on revenue projections.  If the projections exceed the budgeted expenses, then the State must either find ways to spend the money or give it back to the taxpayers. Remember, government has no way of generating money that it does not extract from someone else either by taxation, fees or fines. 

Against this backdrop, Maine Republican lawmakers have been working to make sure that State government does not grow beyond the needs of the people nor beyond those same people’s ability to pay for it. 

I was appointed to the Joint Standing Committee on Appropriations and Financial Affairs in January, 2022.  The task at that time, coming out of the pandemic, was to develop the spending plan for the nearly $1.3 billion in projected surplus revenues.  The administration had some ideas of what they wanted to spend the money on as did the Legislative branch.  Those ideas were pulled together to create the Supplemental Budget passed by LD 1995 in the second session of the 130th Legislature.  After considerable negotiation, that supplemental budget was passed with a 2/3rds majority on April 19, 2022.  LD 1995 included two major tax relief items for Maine people.  First, it included $850 tax refunds to Maine taxpayers who met certain income criteria.  If you filed single and made less than $100,000 or jointly and made less than $200,000, you were eligible for the tax refund.  This effort was scheduled to return $729.3 million to an estimated 858,000 Mainers.  When the program was complete, there were nearly 888,000 taxpayers that got a total of $755 million

That same Supplemental budget, the Legislature passed the funding for an increase in the private pension exemption for retirees.  The current limit was $12,500 per person per year.  This exemption increases to $25,000 in 2022, to $30,000 in 2023 and $35,000 in 2024. This will save retired Mainers about $65 million.  Earned Income Tax Credit was increased by 50% valued at $26 million and the Property Tax Fairness credit and Educational Opportunity Tax Credit were also increased totaling $59 million in additional benefit to Maine taxpayers. 

In December 2022, the Legislature came together for the bipartisan LD 3, An Act to Establish Winter Energy Relief Payment Program.  This bill returned excess revenues to people who had been eligible for the original $850 tax rebate to get more of their tax money back to help heat their homes in the face of incredible energy price increases.  While this was billed as “Energy Relief”, this money really was returning over collected revenues to Maine taxpayers based on the December revenue forecasts.  This effort returned $473 million to Maine taxpayers at a time when energy costs were spiking and Mainers needed to heat their homes.

You can easily see that over $1.3 billion of your tax dollars have been returned to Maine taxpayers in the last 12 months.  Maine Republicans have been saying that we are overtaxing our people and the proof is in these numbers.  On April 28, 2023, Maine’s Revenue Forecast Committee will meet to determine what the current revenue surplus looks like.  Maine Republicans believe that part of the conversation around what to do with that surplus MUST be a tax relief for all Mainers.  To that end, I have introduced LD 1671, An Act to Reduce the Income Tax to 4.5% on the Lowest Tax Bracket and Remove Low-Income Families from Taxation.  This bill is estimated to cost around $270 million over the biennium.  That amounts to only 2.6% of the current revenue projections of $10.5 billion.  There are other tax reduction bills being debated in Augusta. 

Regardless of which bill rises to the top it is clear that we MUST stop taking more money from Mainers to run government than we need.  Remember, any revenues that the State receives must be allocated and spent in some way. The question remains, will they do the right thing and provide tax relief to hardworking Mainers? 


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