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home : • politics : • government
January 27, 2020

11/13/2014 10:57:00 AM
Eye on Augusta: Digging Our Way Out by Cutting Taxes, Welfare & Renewable Energy Investments
Incoming Senate President Mike Thibodeau talks priorities
Sen. Mike Thibodeau on the campaign trail earlier this year
Sen. Mike Thibodeau on the campaign trail earlier this year
by Andy O’Brien

When Gov. Paul LePage and a Republican-majority Legislature were voted into power in 2010, it was the first time that the GOP gained complete control of Augusta since 1966. During those first two years, Republicans went full-speed ahead with a conservative agenda to deliver the largest tax cut in Maine history through reductions in the income and estate taxes while slashing anti-poverty programs and health care for the poor. But following Democratic wins in 2012, the past two years have been marked by partisan gridlock, tense showdowns over the budget, and a record 183 governor vetoes as the Democratic-controlled Legislature tried to push their own radically different policy goals in a divided government.

But with LePage's recent re-election, the GOP retaking the Senate, and big Republican wins in the House last week, these next two years might yield more successes for the GOP than the last term. In the incoming 127th Legislature, there are only eight votes in the Democratic-controlled House standing in the way of the governor's agenda. Those eight House members may make the difference on a range of issues, from energy to welfare and taxes.

Senate GOP to Take on Money in Politics

Last week, Senate Republicans threw their support behind Mike Thibodeau of Waldo County to be the next Senate President after his narrow win in the election by just 97 votes. Pending Friday's recount, Thibodeau, who comes from a prominent Winterport business family, will likely take over the gavel from Sen. Justin Alfond of Portland. With a thick, Maine drawl and a folksy down-home demeanor, Thibodeau is a staunch social conservative with a distaste for taxes and government regulations. Therefore, it came as a surprise when the senator announced that one of his priorities in 2015 would be to rein in the power of "dark money" in elections. While Thibodeau has consistently rejected campaign finance reform legislation in the past, Democrats outspent the GOP three-to-one in legislative races in 2014. This time it's personal.

"The Maine Democrats spent $1.4 million, $865,000 of it spent maligning perfectly good people that put their lives on hold for public office, an office that pays $12,000 a year, I might add," said Thibodeau. "None of it was based around policy, but instead just simple personal attacks, much like the race that I just came through that absolutely was not based in any fact."

With 300 volunteers, Thibodeau's Democratic opponent Jonathan Fulford reportedly knocked on 8,443 doors in the district while his campaign staff knocked on 4,503 doors and made over 15,000 calls in support of their candidate. However, Thibodeau believes that $76,000 in last-minute spending against him by outside liberal groups was a major factor in nearly unseating him. With a margin of just 100 votes in two other Senate races where Democrats won, Thibodeau says he believes that without the massive spending by Democratic-allied groups, he could have garnered another two seats in his caucus.

"We think it is a serious problem," said Thibodeau. "We think that [financier] Donald Sussman giving the Maine Democratic Party $3 million to try to buy the state Legislature is terrible public policy. Something needs to be done."

Due to Supreme Court rulings that have equated money with free speech, states cannot limit the amount of money spent in elections by outside groups. But they can still provide public financing for elections and enact disclosure laws that tell voters who is funding the message. Thibodeau said he is still working out the details of his bill and would only say that it would be "comprehensive" and would include disclosure provisions.

In the past, Republicans have opposed bills that would have required political action committees (PACs) to disclose their donors and voted down LD 1309, which would have strengthened Maine's Clean Elections law that provides public financing for candidates. Thibodeau also upheld Gov. LePage's veto of LD 1271, which would have increased penalties for violating campaign finance laws.

B.J. McCollister, who is organizing a campaign finance reform referendum for the group Maine Citizens for Clean Elections, said that he is pleased that Thibodeau intends to champion the issue, but he has yet to see the plan.

"A robust public financing system and disclosure is how we fight outside money," said McCollister. "[Thibodeau's] race is a perfect example. Neither of the candidates were slinging that much mud. It was all of the outside groups slinging the mud, so I would hope that the incumbent Senate President is committed to disclosure and strengthening Clean Elections."

McCollister added that his group is hoping to be able to submit its completed petition by January 22, which would give Thibodeau the chance to vote on the measure before it goes to voters.

Cutting Taxes for the Wealthy

During a press conference last week, LePage announced that one of his priorities in his next budget will be to lower the income and estate taxes for the wealthiest Mainers and eliminate taxes on pensions in an attempt to keep retirees from moving to other, lower-taxed states.

"What we need to do is keep those people here," LePage told the Bangor Daily News. "If we keep them here, we keep their capital here. Keeping their capital here keeps their families here and they can help their family members develop small businesses."

To pay for this radical revision in the tax code, LePage said that he would expand the sales tax to more items. Ironically, in 2010 LePage ran against a previous Democratic plan to lower the income tax by expanding the sales tax, which was repealed by the voters on the same day he won the Republican nomination in a crowded GOP primary. The Republican strategy to repeal a traditionally Republican idea is widely credited with rocketing LePage to a win. Thibodeau said that he had not seen the governor's plan, so he could not comment on it. However, he did say that he would not support extending the 0.5 percent increase in the sales tax, which was raised last year by the Legislature, when it expires next June.

Gov. LePage also reiterated his vow to end revenue sharing to municipalities. The program, which is meant to relieve the property tax burden and pay for essential municipal services, is derived from a combination of sales, service provider, personal and corporate income taxes. LePage said he'll take that money and send it directly to property tax payers.

"The towns spend it faster than they can shake a stick at it," the governor told the BDN. "If you pay property taxes, we're sending you your share of revenue sharing directly."

Thibodeau said he would oppose any plan to get rid of revenue sharing, which was a program his opponent ran on fully restoring after the Legislature cut it by a third in 2013. Thibodeau pointed out that he didn't vote for that budget.

"We are in tough economic times, but I will fight once again to try to keep that system in place," said Thibodeau. "Whether or not we are successful remains to be seen, but I've always been an advocate."

Thibodeau said that he intended to initiate a new committee to look at ways of eliminating "unfunded, unnecessary, and burdensome" mandates on municipalities that are not properly funded by the state. He did not identify what those mandates are, but said that he intended to engage the Maine School Management Association (which represents school boards and superintendents) and the Maine Municipal Association (which represents most towns and cities) to solicit input on what unnecessary laws need to go away.

MMA lobbyist Geoff Herman said that the main problem is not that the mandates are unnecessary, but that the state is only paying 40 percent of what it is required by law to share with towns.

"Most of these mandates, if not virtually all of them, are things that need to be done," said Herman. "It's not silly stuff that's being mandated. It's important stuff."

He said that many municipal mandates are older than the state, including elections and general assistance for the poor. He added that the modern revenue-sharing formula was created in the 1970s at a time when towns and cities were required to comply with expensive mandates like shoreland zoning, comprehensive land use planning, and solid waste management.

"Revenue sharing is a very efficient and elegant way for the state to financially participate," said Herman. "If the state was honoring the revenue sharing system, there would be a lot less concern with all of these little programs that we're required to do because there would be a recognizable level of state financial support."

He added that of the three major taxes in Maine, property taxes generate the bulk of revenue at 45 percent, while income taxes bring in 33 percent and sales taxes generate 22 percent of revenue. The current tax code is not fair, he said.

"From our perspective, there's a big imbalance and we should do something about rebalancing that code," said Herman.

On the school side, one unfunded mandate that MSMA is vocally opposed to is the funding model for charter schools, which requires that schools pay about $8,000 a year for each student in the district that attends the privately managed institutions. So far, Maine school districts have been forced to funnel $5 million to the state's six charter schools with no input from local school boards. Approximately $2 million of that is going to Connections Academy, a for-profit online "virtual school." However, this is one unfunded mandate that Thibodeau continues to vigorously support.

Doing Away with Renewable Energy Investments

Thibodeau and LePage both said another top priority for the GOP will be to resubmit a proposal to allow non-wind energy projects larger than 100 megawatts in capacity to qualify for the state's Renewable Portfolio Standard (RPS). Maine's RPS law requires that 36 percent of electricity consumed in Maine comes from renewable power, but only wind power plants can be larger than 100 megawatts. If the provision was removed, they say Maine would be able to purchase low-cost energy from Quebec's state-owned hydro plants. However, as critics note, the RPS requirements are not stopping Maine from buying Quebec's hydro power now. The rules just prevent Hydro-Quebec from flooding the market and crowding out other more expensive forms of renewable power like wind, solar, biomass and others.

Last year, an unlikely alliance of environmental groups and paper mills strongly opposed the governor's plan and effectively killed the legislation. They argued that Canadian hydro plants are already cost-competitive, receive substantial subsidies and don't need incentives. Advocates for the state's RPS standards also referenced a 2011 state-commissioned report by the London School of Economics, which found that the cost of complying with Maine's RPS in 2010 was only about 0.6 percent of a typical residential customer's monthly bill. The LSE report also concluded that Maine's RPS could potentially create 11,700 jobs with the economic activity that locally distributed energy stimulates, while Hydro-Quebec only creates jobs for Canadians. Testifying on behalf of the state's paper mills last year, Industrial Energy Consumer Group President Bob Dorko said that paper mills have benefitted from the RPS policy by making large investments in biomass energy generation.

"Removing the current 100-megawatt limit would likely result in out-of-state entities entering the market without investment in equipment and jobs in our state," said Dorko.

Thibodeau shrugged off the opposition from the mills, arguing that it didn't make much difference when the Verso paper mill in Bucksport announced its closure in September.

"They told us emphatically that if you lift that 100-megawatt cap, Verso won't be there and you'll lose all them jobs; well, guess what? We've got the hundred-megawatt cap and we don't have them jobs," said Thibodeau. "It's time for us to revisit that issue."

When the mill announced its closure, it cited weak demand as well as high energy costs.

Taking Another Stab at Welfare

If there was one issue that defined Gov. LePage's campaign, it was welfare, and Thibodeau says it will be a top priority in January. At the end of last session, LePage submitted a flurry of bills to tighten restrictions on Temporary Assistance for Needy Families (TANF), a cash assistance program for low-income families accounting for less than 0.5 percent (or $30 million) of annual general-fund spending.

"We fully expect that them bills will receive another opportunity to be heard by the Maine Legislature," said Thibodeau. "I can't imagine that my Democratic colleagues down at the end of the hall didn't hear the same message that I heard out on the campaign trail. People want to make sure that we have a strong safety net, but we do not want people abusing that system."

TANF is only available for families with children, and nearly 90 percent of Maine TANF households are headed by women. The program currently serves nearly 8,000 families and 12,000 children, with a maximum monthly benefit of $485 for a family of three. (For an overview of the bills LePage will likely resubmit, see "Welfare Dependency and the 2014 Campaign," Free Press, 4/3/2014.)

Medicaid Expansion Is Probably Dead

Thibodeau dismissed any notion that there will be a discussion of accepting millions of dollars in federal Medicaid money to expand health care for 70,000 low-income Mainers. Recently, as the result of cuts in the Medicaid program, Waldo County General Hospital announced that the number of uninsured low-income people using its charity care program jumped by over 6 percent. At the same time, the hospital's charity-care and bad-debt costs spiked from $10,470,000 in 2013 to $11 million in 2014. However, Thibodeau said that the Legislature can't afford to take the federal money.

"It's a wonderful thing if we can be all things to all people," said Thibodeau. "We're going to set priorities and we're not going to make the state's budget a priority over the family's budget."

Reader Comments

Posted: Monday, November 17, 2014
Article comment by: John Blake

Elected by the Beans of Egypt Maine in the first election and re-elected by the rich who moved here and have slowly destroyed the state. The poor and underclass came out for this man and he totally abused them. Pandered to the rich who saw him as a tax savior. Maine has slowly turned to a state who has left its poor and middle class behind in favour of the 1%.

Posted: Friday, November 14, 2014
Article comment by: Bill Bachofner

Seems as if the Senator and the Gov have some issues to iron out in their agendas.

It also seems as if the tax cuts for the wealthy in the Gov's first two years will be expanded while the bullying of the poor and marginalized will continue and also be expanded.

Finally, state funded mandates need to be funded at 100% not 40% so any mandates that are not being funded as such should be removed.

Posted: Thursday, November 13, 2014
Article comment by: Gerald Weinand

I love this about Sen. Thibodeau:

"Thibodeau said he would oppose any plan to get rid of revenue sharing, which was a program his opponent ran on fully restoring after the Legislature cut it by a third in 2013. Thibodeau pointed out that he didn't vote for that budget."

Indeed, Thibodeau did not vote for that budget. Instead, he voted to sustain LePage's veto of the budget which would have led to the shutdown of the State government (the veto was overridden).

The real question is whether Thibodeau will support restoring Revenue Sharing to towns to previous levels.

Posted: Thursday, November 13, 2014
Article comment by: Gerald Weinand

Groups have already learned to work around Maine's campaign finance disclosure laws. In 2010, the PAC controlled by the Republican Governors Association (RGA) raised $1.8 million from a variety of corporations and advocacy group, and curiously, $225,000 from the Michigan Chamber of Commerce.

This cycle, the RGA Maine PAC raised more than $5.1 million, every dollar of which came from the Republican Governors Association. We have no idea who contributed money to the RGA that was earmarked for the groups Maine PAC. Much like we did not know who gave to the Michigan Chamber of Commerce in 2010.

In other words, they effectively laundered the source of the funds used in the gubernatorial campaign here.

It's only a matter of time before other groups follow suit, bringing an opacity to Maine campaign finance not see for years.

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