In State of the State address, Gov. LePage takes aim at taxes, welfare, liberal ideology
Gov. Paul LePage delivered his seventh State of the State address Tuesday night in front of the full Legislature, singling out Maine residents in the audience who he said have suffered the economic consequences of bad policy decisions by lawmakers.
LePage opened his remarks at the State House with a diatribe against liberalism that was clearly aimed at Democrats in the audience. He said the state was losing its younger workers and families “all because of a faulty ideology.”
“Maine was once renowned for its rugged individualism,” he said. “Liberals are now trying to transform our state into a socialist utopia. Utopia is ideology, and no amount of taxpayer money will make it a reality.”
LePage also hit on familiar themes featured in nearly all of his annual messages to lawmakers and the people of Maine. He again said the state needs to lower its income tax with an eye toward eliminating it, that he remained committed to lowering the cost of electric power in Maine, and that he would continue to push for welfare reforms aimed at helping the state’s most vulnerable while ensuring those who are able-bodied can find work.
The governor focused on the state’s oldest residents, saying the growing elderly population, many living only on Social Security checks, faced the gloomiest economic future. He also took aim at a pair of citizen-approved ballot questions that raised taxes on the state’s highest wage earners and bumped the state’s minimum wage to $12 by 2020.
LePage said he is asking lawmakers to blunt the impact of both ballot measures.
“We owe it to our elderly to protect them in their waning years,” he said. “We need to protect our elderly.”
LePage said voters didn’t know what they were voting for because they didn’t closely read the language behind the ballot questions.
“We need to reform the referendum process and we need to return to a representative government,” LePage said. It was a topic that he revisited several times Tuesday night as he urged lawmakers to adopt his two-year budget proposal, which he said is designed to “do no harm.”
LePage said his administration had made strides in cutting the size of government and lowering costs for taxpayers. “But liberals continue to want to provide things to all Mainers that is free,” LePage said. “Ladies and gentlemen, free is very expensive to someone. Unfortunately in this case, it’s the hard-working Mainers they are being forced into areas they have never seen.”
House Speaker Sara Gideon, D-Freeport, said that theme is in conflict with LePage’s desire to again cut income taxes for Maine’s highest wage-earners. During his speech, LePage also said he continued to hear from professionals in Maine – including doctors, dentists and other high-wage earners – who have said they are leaving the state because of high taxes. But after LePage’s speech, Gideon and Senate Minority Leader Troy Jackson, D-Allagash, said they were not getting calls or letters from people complaining about income taxes.
“I don’t know those people,” Jackson said. “And what I don’t understand is why are those people more important than the guys I do know, that have been leaving this state for a long time looking for something.”
Differences on tax burden, cuts
Gideon said her constituents look at all their taxes lumped together, including property taxes and sales taxes. “There is no conversation that includes only an income tax burden,” Gideon said. “It’s about the entire picture, and when you look at the (governor’s) budget as it’s proposed with this income-tax slashing, and you look at an everyday Mainer, someone who earns about $60,000 a year, they are going to get $8 back under the governor’s proposal. When you look at somebody who makes half-a-million dollars a year, they are going to get $14,000 back.”
LePage urged lawmakers to undo parts of a citizen-approved minimum-wage hike. He said not doing so would hurt Maine’s elderly, the tourism business and the wages of restaurant servers who work for tips.
He said one of the worst parts of the new law was that it was indexed to inflation after 2020 and would automatically go up unchecked. LePage said that hike would hurt the elderly by increasing the costs of everything they purchase.
“We need to help them,” LePage said to cheers and applause from his Republican allies. He said voters should have been asked if they wanted to raise the costs of everything for seniors instead of being asked if they should raise the minimum wage.
“The minimum wage was always intended to be a starting wage or a wage for people that could not work at 100 percent of capacity. It was never intended to be a wage you could raise your family on,” he said. “Make no mistake, this minimum wage has nothing to do with economics, it has everything to do with socialist ideology.”
But at least one Maine senior citizen listening to LePage’s speech Tuesday said he was wrong about the minimum wage hike hurting senior citizens.
Kathy Rondone, 73, of Augusta, said she works for the minimum wage to supplement her Social Security, and the recent increase from $7.50 an hour to $9 has made a huge difference to her.
Rondone said she’s earning about $120 more a month, and that’s the difference between being able to afford some necessities or having to wait for them.
“I have not noticed prices going up to (where) all of sudden I can’t afford things,” Rondone said. “It’s just the opposite. I have just a little bit of leeway, where I can get what I need when I need it.”
LePage also urged lawmakers to reform the state’s ballot initiative process so that it would be harder to access and less susceptible to special interests from out of state to bankroll a push for a ballot question. He said the state needs to return to the “representative republic” form of government.
That position contrasts with a statement he made during his State of the State address in 2014, when he vowed to help push for a citizen-initiated ballot question that would eliminate the income tax. Supporters of the proposal were unable to gather the needed signatures for the question and it failed to move forward.
LePage also talked at length about proposals to reform public school funding, and he repeated arguments that Maine is top-heavy with school administrators, saying the state didn’t need to put more money into public education but it did need more accountability.
He said for six years he’s asked for seed money from the Legislature that he could use to entice school districts and towns to work together toward more regionalization. He also said he had started talks with the Maine Education Association about the possibility of a statewide teachers contract as a means of providing pay equity for teachers in all parts of Maine.
Boosting teacher pay, eliminating the state income tax
Gideon said Democrats are open to discussing ways to encourage more consolidation and a potential regional teacher contract, but they need details. And she said Democrats would want to ensure that schools would still receive the state financial support needed to provide a quality education to students.”
“Teachers are one of the most important assets that we have in this state,” Gideon said. She agreed with LePage that parts of Maine had a hard time recruiting good teachers.
“I think the idea of lifting all boats, of lifting all teachers to at least a minimum salary is a good one,” she said. “I’m not sure the idea of statewide contract will get us there, but if that’s part of the recipe, we are open to talking about it.”
LePage continued to hammer on his proposals to work toward eliminating the state’s income tax, saying that his budget proposal brings the state to a flat income tax rate of 5.7 percent.
He again pointed to New Hampshire as an example of a state without an income tax or a sales tax. While noting that New Hampshire has the seventh-highest property tax rates in the country, he said Maine has both income and sales taxes, and the ninth-highest property tax rates.
LePage said he called New Hampshire the “pogo stick” because it was bouncing around on one tax. He said Maine’s system is what “I call a three-legged stool and we are dragging our butts around and we aren’t getting anywhere.”
He had kind words for Jackson, a lawmaker who has previously been on the receiving end of the governor’s criticism. LePage said he and Jackson were in cordial talks on figuring out ways to solve the state’s opioid drug crisis.
Jackson said he is pleased that he and LePage are maintaining a more professional relationship, but he was still going to stand by Democratic principles that would be contrary to some of the governor’s policy goals.
“I don’t really care what’s been said in the past. I believe that letting pettiness get in the way is not something that makes sense,” Jackson said. “I also think there are going to be major disagreements. Hopefully it’s sincere, but at the same time, I’m working with Speaker Gideon to make sure that Democrats are working for the people of Maine.”
After LePage’s address, Republican leaders in the Legislature said the governor was again asking for help to move the state forward.
“I believe the governor challenged us tonight, as legislators, to have the courage to make the tough decisions on taxes, education and the drug crisis,” said House Minority Leader Ken Fredette, R-Newport. “Only time will tell if the political courage exists in Augusta to change the status quo and move Maine forward.”
Senate President Mike Thibodeau, a Winterport Republican who has had an uneasy relationship with LePage, acknowledged that it will be a challenge for the Legislature to garner the two-thirds vote needed to pass a budget. But Thibodeau said lawmakers are up to the task, and he predicted the Legislature will work closely with the governor on other issues, such as taking additional steps to address the opioid crisis.
On the issue of referendum reform, Thibodeau said he rejects assertions – typically made by progressives – that they are using the ballot initiative process because the Legislature has been unresponsive to their issues.
“The fact of the matter is, most of these things have been discussed in the Legislature and the Legislature didn’t see the value in passing different bills that ended up in a referendum process,” Thibodeau said. “Make no mistake, the people of Piscataquis, Somerset, Waldo, Aroostook and Washington counties, they want their voices heard as well. And right now we have a referendum process that allows people to simply go to our two most populous counties, York and Cumberland, and go to the local Wal-Mart and collect the signatures they need to be on the ballot. I think the rest of the state feels they want their voice heard in this process too.”
Upset with all the PUC commissioners
A year ago, LePage was so frustrated with the Legislature that he broke with modern tradition and skipped the annual address, opting to deliver his remarks in writing. But this year, with a $6.8 billion state budget proposal and a host of other issues and initiatives before the Legislature, the governor give an in-person address in the House chamber.
He took aim at Maine’s Public Utilities Commission over a recent decision involving so-called “net metering” for homes with solar energy. That decision allows existing solar customers to continue receiving payback on excess energy they produce at the full retail rate for 15 years while gradually reducing that credit for new customers.
While environmental groups said the changes went too far, LePage was livid with the PUC commissioners because he said it will pass on solar costs to other customers for years to come. LePage appointed all three commissioners, one of whom served as his former chief legal counsel and senior natural resources policy adviser.
“This rule that was just passed by the PUC is the most horrific bill that I’ve ever seen,” LePage said. “And if I had the ability right now I would fire all of the commissioners. Because what they did was unconscionable.”
LePage has long focused on trying to lower the state’s energy costs.
“I can assure you that in the next two years I will fight with every ounce of blood I have to prevent them from putting us in the top 10 (states for energy costs),” he said.