This Week in Augusta – 01.10.2017 Edition

Date: January 09, 2017

SESSION

Tuesday – Senate & House, 10 a.m.

Wednesday – Senate & House, 10 a.m.

http://legislature.maine.gov/

 

1824 BILL TITLES FILED

Legislators have submitted 1,824 proposed bills by title according to a list released publicly this Monday.   Highlights of significant titles and issue themes will be contained in next week’s edition of this newsletter. 

TAX CHANGES PROPOSED IN 2018-2019 STATE BUDGET

Governor LePage is making another attempt at “Building a Tax Code for the 21st Century” by reducing the personal and corporate income tax rates, repealing Maine’s death tax, and broadening the sales tax base. 

  • Gradually reduce the personal income tax to a flat %.75% rate by 2020
  • Delay until 2018 the 3% surtax adopted by voters in November
  • Reduce the top corporate rate to 8.33% from 8.93%
  • Expand the sales tax to amusement & recreation services; household services; installation; repair and maintenance; personal services; and, personal property services (but continue to exclude carpentry, plumbing, electrical repair, and motor vehicle repair)

He is also proposing to increase the lodging tax to 10%.

He is proposing scraping the existing state funding formula for K-12 public education and having the state negotiate (and pay for) a statewide teacher contract as part of “Education Reforms That Put Students First”.  The Governor’s budget briefing document indicates that Maine has 43 school districts with 1-299 students – an average student population of only 123 – but average spending per pupil of $882 on administration.  The next level includes 37 districts with 300-999 students (average of 642 students per district) and spending on administration of $508 per student.  Maine overall has 147 districts and spending on administration of $375 per student.

The tax reform and education funding initiatives will be controversial and challenging for a majority of legislators to support.

www.maine.gov/budget/

 

GOVERNOR’S BUDGET VISION

“My priority as governor has always been to tackle our long-term fundamental challenges so we can improve Maine’s economic future. I have never created a budget for the next election; I have always constructed a budget for the next generation. My final biennial budget proposal, which I submit today for consideration to the Maine Legislature, seeks to protect our future by mitigating the severe damage to our economy that will be caused by two citizen initiatives approved in November. This budget also protects our state’s most vulnerable people, especially our elderly, who are already struggling to make ends meet.

“Now more than ever, after well-meaning citizens voted on these initiatives with little or no understanding of how destructive they would be to Maine’s fragile economy, we are teetering on the precipice of a financial catastrophe. I cannot in good conscience submit a budget that would exacerbate the damage to our economy and hurl the state over the edge.

Source: “2017 Supplemental & 2018-2019 Biennial Budget Briefing”.

 

MINIMUM WAGE & OVERTIME THRESHOLD GO UP

Maine’s statewide minimum wage rate increased to $9 an hour on January 7 as a result of the minimum wage referendum approved by voters last November. The minimum wage for tipped workers is now $5 an hour and the corresponding tip credit is $4.

In Portland the minimum wage rose to $10.68 an hour on January 1.  Bangor city councilors recently voted to delay until July 1 the effective date of its minimum wage ordinance.

The new statewide (including Portland) overtime pay salary threshold for exempt qualified white-collar workers is now $27,000 a year or $519.24 a week.

A progressive advocacy group that backed the wage increase is proudly claiming that 103,000 workers received a pay increase averaging $1,300 a year.  “That’s roughly a hundred dollars a month that will help Mainers provide for themselves and their families, pay off their debts, and save for college, unexpected expenses, and a secure retirement,” said the Maine Center for Economic Policy.

NFIB and other business groups will be asking legislators to restore the tip credit, which the new law phases out, and enact other changes that would soften damaging effects of the law.

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