Governor’s Budget Brings Major Tax Relief, Prioritizes Funding for Elderly and Disabled

AUGUSTA, Maine – Friday, Governor Paul R. LePage released details about the FY 2016/2017 biennial budget, which contains a $300 million overall reduction in the tax burden for Maine families and small businesses. In the $6.3 billion budget, the Governor is making Maine more competitive nationally by creating an efficient, effective and affordable government.

The cornerstone of the Governor’s budget is his tax proposal, which modernizes Maine’s tax code, lowers top individual and corporate income tax rates, amends the sales tax base to some services and adjusts the sales tax rate, at the same time offering tax credits for low-income Mainers.

“During my first term, we took the first step toward significant tax relief. In this budget proposal we are modernizing Maine’s out-of-date tax code to make Maine more competitive with other states,” Governor LePage said. “I plan to reduce the top tax rate even further to 5.75 percent, dramatically improving our competitive position in this global economy.”

According to the State Business Tax Climate Index by the Tax Foundation, Governor LePage is the
first governor to put a serious tax reform proposal up for discussion in 2015. The Tax Foundation ranked Maine 37th before Governor LePage took office, and then moved the state’s rank to 33rd under the leadership of the Governor during his first term.

If the Governor’s tax plan is implemented, the state’s ranking would leap from 33rd to 23rd on the Tax Foundation State Business Tax Climate Index.

Another major component to the budget is to ensure Maine’s elderly and disabled are cared for. The Governor includes more than $46 million to fund waitlists for the disabled and elderly. An additional $22 million is allocated to nursing homes.

“We are providing the necessary resources to care for the disabled Mainers who have been waiting in line for services they have long been qualified for, but were not funded,” said Governor LePage. “I also propose increased funding for nursing homes to make sure that Maine citizens continue to have access to quality long-term residential care.”

Furthermore, the budget addresses the need for access to primary care and preventative services providing more than $14 million toward primary care provider rates and preventative services.

Democrats and Republicans were briefed on the budget Friday afternoon. Senate President Michael Thibodeau commented, “I would like to applaud the Governor for offering an ambitious series of proposals that take an ‘outside the box’ approach to driving our economy and making Maine more competitive. As the Governor’s budget goes through the legislative process, I can tell you that each one of these initiatives will be given serious consideration. I would like to commend the Governor for putting forth such a bold proposal and look forward to working with him during the 127th Legislature.”

"This budget builds upon the past four years of Republican priorities including income tax reduction, controlled spending at the Department of Health and Human Services and significant tax reform,” said House Representative Kenneth Fredette. “I applaud Governor LePage on his bold initiatives and now getting to work on the legislative process of continuing to support our Republican priorities."

For the complete budget report visit: http://www.maine.gov/budget/budgetinfo/