This Week in Augusta – December 7, 2016 Edition

Date: December 07, 2016


Wednesday – Senate & House, 10 a.m.


Republicans maintain control of the Senate by 18-17 and
Democrats control the House by 77-72-2.
Leadership is expected to be:

President – Michael Thibodeau (R-Winterport)

Leader – Garret Mason (R-Lisbon Falls)

Majority Leader – André Cushing (R-Newport)

Leader – Troy Jackson (D-Allagash)

Minority Leader – Nate Libby (D-Lewiston)

Speaker – Sara Gideon (D-Freeport)

Leader – Erin Herbig (D-Belfast)

Majority Leader – Jared Golden (D-Lewiston)

Leader – Kenneth Fredette (R-Newport)

Minority Leader – Ellie Espling (R-New Gloucester)



Maine employers will get grabbed by state law in 2017
despite a recent federal court order that temporarily blocked implementation of
the new federal overtime regulations on December 1. Maine labor law sets the overtime threshold
for “a salaried employee who works in a bona fide executive, administrative or
professional capacity” at 3,000 times the state’s minimum wage or the federal
threshold, whichever is higher. Instead
of staying at the federal threshold of $23,600 ($453.85 per week) in 2017, come
January 1, when the state minimum wage goes to $9 an hour, employers in Maine will
have to pay overtime to employees who earn up to $27,000 ($519.24 per week).


National and local progressive groups were successful in
getting two citizen initiatives passed – income surtax and minimum wage hike –
on Election Day that are costly to small business. NFIB intends to respond in several ways.

Surtax Elimination – NFIB will push for elimination of the
surtax (Question 2 on the November election ballot). The surtax is not an essential part of the
push for more education funding but elimination of the surtax is an essential
part of creating a path for Maine to more forward economically. The surtax would result in small business
owners being taxed at a higher rate than large corporations such as Walmart or
Bath Iron Works. Maine already suffers
from a lack of upper-income taxpayers. In 2014 tax returns with adjusted gross income of $200,000 numbered
31,380 in New Hampshire compared to only 16,840 in Maine.

Vote tallies show that a majority of voters in 373 towns
voted against Question 2, as did 9 of Maine’s 16 counties.  Question 2 won a majority in only 159 towns.

Minimum Wage Tempering – NFIB will push for legislation that
moderates the effect of the damaging minimum wage changes contained in Question
4.  Legislative proposals will likely

  • capping future inflation increases;
  • establishing a training wage for first-job
    teenage workers;
  • creating a split minimum wage that
    recognizes parts of Maine with struggling economies should not be lumped in
    with parts that have booming economies and very low unemployment; and
  • giving restauranteurs flexibility to work
    with wait staff on the issue of tips versus wages.

Significant Tax Reform – Governor LePage is expected to
propose significant tax reform as part of his 2018-2019 biennial State Budget
that will be submitted by January 6 to the legislature. Past attempts at tax reform by the Governor and
former Governor Baldacci were viewed as tax shifts and defeated. Key legislative leaders have signaled that an
overall reduction in tax burden is essential to potential Republican acceptance
of tax reform. NFIB members in the past
have opposed tax-shift tax reform that would expand tax burden without adequate
limitations on the growth of state spending.

Other Issues – Numerous other issues affecting the
workplace, employment, taxes, health insurance, regulation, and other matters
will likely emerge from proposals submitted by legislators. The list of potential issues will not be
known until sometime in January, after a list of proposed bill titles is
released publicly.


NFIB took the lead days after the November 8 election and
filed petitions with over 300 voter signatures to force a recount on Question 2
and its imposition of a 3% surtax on households with taxable incomes over
$200,000.  NFIB organized a broad
coalition of concerned business groups and began preparing for a recount that
was slated to begin on December 1. Working
with NFIB on the coalition steering committee were the Associated General
Contractors of Maine, Maine Beer & Wine Distributors Association, and Retail
Association of Maine.

Along the way several things happened that caused us to
change course. First, the vote margin
between “Yes” and “No” grew to 9,580. Second, the Secretary of State insisted on a dual recount process for Question
2 and Question 1 (recreational marijuana), which was unprecedented and arguably
not permitted by the Maine law governing recounts.  Third, the cost of proceeding with a recount for
even a few days (e.g., retaining a recount professional to oversee daily
operations, legal counsel, possible legal action, etc.) were significant. Fourth, we were advised it would be almost
mathematically impossible to overcome the 9,580 vote margin. Lastly, we concluded it would not be prudent
to ask business people to spend money on the recount with these factors
weighing against success; instead, their money would be better invested in
advocating for legislators in 2017 to eliminate the surtax.

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