Phil: Yo, Ethan! Did you see my guy stand up to two of the biggest special interest groups in Maine?
Ethan: Are you talking about Gov. Paul LePage taking on the Maine Municipal and Maine Education associations by freezing payments to municipalities while also telling them they have to absorb 50 percent of the cost for teacher retirees?
Phil: That’s the one! Isn’t it refreshing to see someone finally challenging the status quo in state government and taking on those who have been influencing and electioneering legislators for decades?
Ethan: Personally, I’d rather see him go after special interest big businesses that get all that corporate welfare.
Phil: You are in luck! His budget also cuts money from the tax rebate program for retail giants like Walmart.
Ethan: While also eliminating everyone’s Homestead Exemption and Circuit Breaker program rebate!
Phil: I tell you, this is going to be the governor’s crossing of the Rubicon. It appears he’s going for the jugular of taxpayer spending at every level of state government with no turning back. Perhaps this will be a breakthrough where we take all the revenues, at every level of government, and allocate them to the highest priorities, instead of the highest bidders.
Ethan: Well, if you mean that he will utter Julius Caesar’s famous “alea iacta est” (the die is cast) regarding his re-election prospects, then I expect you are correct. If he signs these cuts into law, the revolt from property taxpayers is going to put his popularity below that of former President George W. Bush.
Phil: He is the contrarian to Henry Adams who said, “Practical politics consists of ignoring the facts.” Instead, LePage is facing the facts that we don’t have the resources in the private sector to pay for all the government spending.
Ethan: The problem is that all he’s doing is shifting the burden onto towns and cities that will have to raise property taxes to meet their bare-bones budgets. In essence, he is transferring the income-tax reductions he implemented last year for property-tax increases this year. And property taxes hurt the middle class much worse than income taxes.
Phil: We both know this budget will look very different in June. They all do. What’s different this time is that we need everyone to face the fact that we can’t sustain the current level of spending being forced upon us at all levels of government. Property, sales, income, county, excise and federal taxes all come out of one place. My friend Low Lee Taxpayer is barely getting by. He needs less spending.
Ethan: Even assuming what you say is true (and I highly disagree that we need less spending in our schools, on our roads and for our elderly), the governor is basically using a two-year gimmick to balance the budget. Shift the burden to property taxpayers for two years, and then the state takes up the tab again. How does that help the next generation?
Phil: It helps the next generation when and if town leaders muster the will to implement strategies that reduce costs just like the governor has done. It’s not that we want to, it’s that we have to.
Ethan: My hope is that our state Legislature musters the will to defeat any proposals that will result in our property taxes going up or our spending on schools going down. I will give the governor credit for his reductions in the Business Equipment Tax Reimbursement program (I tried to cut that on an annual basis) and for his investments in education, especially Jobs for Maine’s Graduates.
Phil: I agree that he has a done a great job prioritizing students in these tough times.
Ethan: But the Democrats should simply bite the bullet and replace the property-tax increase by eliminating the income-tax reduction. They never should have voted for it in the first place, and now they can make up for their sins.
Phil: Your Democratic colleagues shouldn’t be chastised for enabling Mainers to keep a little bit of their money, especially the 70,000 low-income people who benefit most. We’ll get some of that income tax back in the form of sales tax when they start spending the extra dough the tax breaks put in their pocket.
Ethan: Extra dough? We’re talking like $5 to $10 a month for low- and middle-income Mainers. That’s barely enough to buy a gallon of milk and a box of cereal these days. It’s the upper incomes that will see the biggest benefit from this tax cut, and we can’t afford to be doling out cash to folks who are doing just fine in this economy.
Phil: I think all Mainers could use some extra cash these days. That said, I agree with you that the Legislature will now have its turn to come up with ideas to balance the budget. Stand by, it’s going to be interesting to see what the Legislature will slash to keep money flowing into town hall. In the meantime, all hail our mighty Caesar for trying to save the republic!
Ethan: Let’s hope he doesn’t break up the empire first.