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Governor’s Address: The Universal Home Care Referendum will be disastrous for Maine’s economy

Ballot Question 1 is another benign-sounding, feel-good referendum. In reality, it’s one more in a long line of over-simplified referendums with a real downside for Maine’s economy.

Like the minimum wage referendum, which also changed how restaurant servers are paid, and the people’s veto question on ranked choice voting that was completely misleading, Question 1 lacks essential information.

It asks, “Do you want to create the Universal Home Care Program to provide home-based assistance to people with disabilities and senior citizens, regardless of income, funded by a new 3.8% tax on individuals and families with Maine wage and adjusted gross income above the amount subject to Social Security taxes, which is $128,400 in 2018?”

Of course we want to take care of our seniors and people with disabilities and keep them in their homes. But this referendum’s backers are disingenuous. They haven’t supported my bill to reform the municipal foreclosure process for our elderly. Neither have they provided a way to eliminate waitlists for our people with intellectual and developmental disabilities.

Instead, these socialists have come up with yet another scheme to tax Mainers and funnel it to unions. They’ll make Maine the highest-taxed state for all households whose combined income totals more than $128,400, no matter the source.

The question’s wording leaves out essential information, like the establishment of a massive bureaucracy with no state oversight. The new system will require the state to turn over the names and contact information of any person with a disability who may receive any in-home care and of our seniors over 65 to any person who wants to run for the board and any union. This is a massive violation of personal and medical confidentiality.

But there are more risks. The Office of the State Economist has modeled the impacts of the 3.8 percent tax. Right now, our economy is doing well, but there are circumstances out there that can tip the balance. Passing this referendum will send our economy over the cliff.

The State Economist projects passing this referendum will, by 2023, result in a loss of $1.4 to $2 billion of Mainers’ total personal income. It will have significant negative effects on Maine’s population, labor force, employment and gross domestic product.

We already know that to grow our economy, we need more people. Passing Question 1 will not only drive high earners out of the state, but couples who both work are also at risk of having their income tax skyrocket.

Here’s the conservative estimate of the dangers of this referendum: in the first year of the tax, Maine’s population would fall by between 1,200 and 1,700 people; in the first year, our labor force would fall by 1,300 to 1,800 workers; nonfarm employment would lose between 2,600 and 3,800 jobs; cumulative losses in total personal income by 2023 would be $1.4 to $2.0 billion, and cumulative losses in our real GDP would be between $643 and $916 million. 

Our economy is growing in all of these measures. In 2017, Maine’s population grew at the fastest rate in more than a decade and private non-farm employment reached a record high. Wages are growing at the fastest rate in two decades.

I want Mainers to prosper. Our economy is finally helping so many hard-working families get ahead. Now is not the time to pass a first-in-the-nation tax scheme theoretically to support in-home care for our elderly but that has no restrictions on income to qualify, no residency requirement, that violates confidentiality of our most vulnerable, and that authorizes putting seniors and people with disabilities on even more waitlists.

In other words, a wealthy summer resident like Martha Stewart could qualify for this program while your elderly, ill aunt on a fixed income sits on a wait list, and you suddenly pay the highest income tax in the nation.

Question 1 is a bad deal for Mainers.

Thank you.

Paul LePage


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