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This week’s edition!

Governor’s Address: Democrats Delay the Tough Decisions until after the November Election

As the legislative session enters its last weeks, Democrats are sitting on their hands, hoping voters won’t notice they have avoided making the tough decisions that affect your families, businesses and wallets.

Tax conformity and funding Medicaid should be two separate, simple issues. However, the Democrats have linked them in their search for Medicaid expansion funding. The end result? They are doing nothing on either.

“Tax conformity” is when the state adopts the same tax code as the federal government to avoid having two sets of laws—one for federal taxes, and another for state taxes.

Maine should conform, but we must ensure it doesn’t increase taxes—you should keep the money you have earned. Here’s what you need to know.

If we don’t conform, Maine will collect about $15 million more in revenue. However, businesses will have to keep two sets of books to comply with different state and federal tax rules.

This is a giant headache for our local businesses. In addition, the state will have to create a new bureaucracy to manage the two tax codes, essentially eating up that increase in revenue.

If we do conform without ensuring we remain revenue-neutral, taxes on hard-working Mainers will increase by a massive $233 million. Because we had already implemented several of the reforms in the federal legislation, simply conforming won’t decrease what you pay in taxes, and individuals end up paying more.

My conformity bill makes key changes, avoiding this tax increase on small businesses, corporations and, most importantly, families. But Democrats see the $233 million as a windfall they can use as a down payment on Medicaid expansion.

We told the legislature that DHHS needs money to hire more staff and pay the medical bills for the 80,000 new people who will jump on Medicaid. So Democrats have a new plan.

They’ll pass a bill allowing DHHS to hire the staff. But they refuse to allocate more money to pay the state’s share of the medical bills. Instead, they say, “Oh, just use the money you already have allocated for the next fiscal year; it won’t run out until next May.”

Folks, when funds are allocated by the Legislature to pay for an existing program’s budgeted expenses, it is irresponsible and illegal to use those funds for a program’s expansion—for which zero funds have been allocated—when there’s not enough money to pay the bills for the full year.

This mentality created the last financial disaster when Maine expanded Medicaid in 2002.

We ended up owing hospitals $750 million, and the state lurched from budget crisis to budget crisis every year.

Democrats know that if they enact tax conformity without my changes, it will result in more tax revenue. And they know they cannot fully fund Medicaid expansion without raising your taxes.

They are just waiting until after the November election to grab the windfall.

They’ll make campaign promises about lowering taxes and giving free healthcare to everyone. Then, under the guise of helping the mom-and-pop businesses, they’ll pass watered-down tax conformity without my provisions that avoid a tax increase, and use the $233 million to pay for Medicaid for able-bodied adults.

Don’t let them get away with this bait and switch.

Thank you.

Paul LePage


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