The Maine Republican Party’s decision to commit both funding and manpower to Gov. Paul LePage’s drive to eliminate Maine’s income tax and cut welfare spending will likely provide short-term benefits for the party’s candidates for election.

But the effort to pursue referendum campaigns on the two issues also poses long-term risks for future legislators and the next governor.

Welfare reform and tax cuts are core principles for Republicans, and ballot campaigns on those questions could mobilize conservative voters, who are more likely to support Republicans on the 2016 ticket. A welfare initiative could be especially beneficial, and Republicans have deftly capitalized on the issue in the past.

Although the party’s bid to eliminate the state income tax also may have popular appeal, its passage could be problematic for future lawmakers, who will be held accountable for the fiscal effects in their home districts.

The ballot effort, if successful, raises the likelihood that the struggle to pay for the tax elimination – cuts to government services, additional fees or a tax shift – will largely fall to the Legislature and whoever succeeds LePage.

Mark Brewer, a political scientist at the University of Maine, says much will depend on how the ballot question is written, when it goes into effect, and whether if offers a plan for dealing with the lost tax revenue.

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“If it’s just an over-time elimination of the income tax with no specificity of how to replace it, then that puts the onus on legislators on both parties to say, ‘OK, how are we going to come up with this?'” Brewer said. “As the party driving the ship on this, the Republicans will have a lot more pressure on them to say how they fill the hole.”

PAST REFERENDUM SHOT DOWN

Backed by the endorsement of Democratic Gov. Kenneth Curtis, the Legislature enacted the income tax in 1969 to plug a hole in the state budget and avoid a government shutdown. It passed by one vote each in the House and Senate.

When an effort to repeal the tax by referendum surfaced in 1971, Curtis became a staunch advocate for keeping it. He repeatedly warned of draconian cuts and massive increases in the sales and property taxes.

Repeal supporters “have not offered a single suggestion of how to reduce state spending,” Curtis told the Portland Press Herald in 1971.

“God help the poor property taxpayer,” said then-Senate President Kenneth MacLeod, a Republican, assuming that property taxes would skyrocket to pay for services.

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Voters rejected the repeal with nearly 75 percent of the total votes cast.

Forty-four years later, LePage is gearing up for another assault.

The governor has made the complete phase-out of the income tax his primary policy objective since he was re-elected in November, vowing to kill the tax and campaign against candidates who oppose it – be they Democrat or Republican – until the end of his second term. Two weeks ago he told a Bangor radio station that he was avoiding the traditional summer parade circuit to “rest up” for the ballot campaign.

LePage’s determination was likely fueled by frustration with the Legislature, which rejected his efforts to pass a $6.7 billion state budget for the next two years that incorporated a modest income tax cut.

Lawmakers also refused to pass a LePage bill that would amend the Maine Constitution to phase out the income tax by 2020 and send the question directly to the public for a referendum vote.

Among the governor’s opponents were Republicans, who were unwilling to support him on the income tax because his plan raised other taxes.

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INCOME TAX DEBATE WITHIN PARTY

Rick Bennett, chairman of the Maine Republican Party, acknowledged the fierce disagreements among LePage and state lawmakers but said there remain two issues on which Republicans all stood “side by side, shoulder to shoulder.” One, he said, was welfare reform, and the other was eliminating the income tax.

Bennett said both issues reflected the will of voters from the 2014 election, in which LePage was re-elected with a record number of votes and Republicans made significant gains in the Legislature.

“It is rare for us to take a position on any policy matter,” he said, “but given the dynamic of the legislative session and the frustration of the will of the people from the 2014 election, we believe it’s time to move on these two very important issues for Maine’s future that were ultimately frustrated by Democratic intransigence.”

Brewer, the UMaine professor, said ballot questions on the income tax and welfare could benefit Republican candidates, in a year when a presidential election and likely referendums on legalizing marijuana use will attract more liberal voters.

“You have a presidential race in 2016 that generally puts Republicans at a disadvantage in terms of the electorate that comes out (to vote),” he said. “If I were the Republican Party leader, I would want something on the ballot that could counter that, especially if marijuana is going to be on the ballot.”

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But some Republicans are skeptical.

Lance Dutson, a longtime activist who worked as communications director for the party and the campaign for U.S. Sen Susan Collins, said using the income tax as an electoral strategy may help Republicans at the ballot box, but it won’t end the intraparty disagreement about taxation.

Dutson is now heading a group, Get Right Maine, designed to counter LePage’s governing style, divisive behavior and what he described on a recent Maine Public Broadcasting Network program as “the cult of personality” among some of the governor’s supporters within the party apparatus.

“What I’m afraid of is that this again is the governor’s attempt to circumvent the Legislature,” Dutson said.

A key question confronting the new Republican effort is this: Are Mainers as angry or motivated about the income tax as they are about welfare?

Brewer isn’t sure, but he believes Republicans should be ready to talk specifics. Slogans about the wonders of supply-side economics may not cut it with voters.

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The income tax generates $1.4 billion in revenue each year, about half of what it takes to run state government under the budget just passed by the Legislature.

PLANS FOR NEW REVENUE UNCLEAR

The question of how to pay for income tax elimination was posed repeatedly during legislative debate over LePage’s proposal to amend the constitution. It was never answered.

During a May 13 public hearing, LePage officials declined to identify specific cuts in state government that would be necessary, instead repeating slogans that will likely be heard again if there is a referendum campaign: Mainers deserve a tax cut. They should also decide how they want to be taxed.

Arrayed against LePage and the Republican Party will be Democrats and their allies on the left, who will use the opportunity to talk about what the income tax pays for while predicting apocalyptic consequences if it is done away with.

Some critics have already pointed out that the state could stop funding education entirely and still not pay for the elimination of the income tax. Doubling the sales tax wouldn’t pay for it either, they said.

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The stakes will be high for Republicans, who will have to weigh loyalty to their governor and his interpretation of key party principles against how their constituents feel about massive tax shifts or cuts in core services.

Dutson, the Republican activist, said getting rid of the income tax – only to replace it with a massive sales tax expansion – would be a hollow victory.

“That’s the core of the inner-Republican battle that the governor fought and lost during this last legislative session,” he said.

But other Republicans, such as York County state committeewoman Genie Jennings, believe that “working towards our stated goals will be beneficial to us all.”

She added: “If the Republican Party seems splintered to those on the outside, it is because we are a bottom-up organization. Our leaders, elected and otherwise, do not dictate our thinking.”

 


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