The State Houses – What’s At Stake in 2010

Thirty-nine states will be electing a governor during the 2009-2010 election cycle. Of these, eighteen races will not include an incumbent and four incumbents who will be running were not elected to their current position. The recession and huge budget deficits threaten to undercut the power of incumbency for governors running for reelection.

The Current Line-Up

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Jun
09

ME: Tax Overhaul Rejected

By · Jun, 09 2010

Maine voters soundly rejected the legislature’s effort to overhaul the state’s tax system. The new law, which had been put on hold pending the outcome of the vote, would have lowered income taxes while expanding sales taxes on several new items and increased the meals and lodging tax.

According to Maine Revenue Services estimates, 90% of Mainers would have seen a net tax reduction. Despite those forecasts, voters chose the status quo.

Supporters of tax reform have said that the changes would shift the tax burden more evenly and provide stability to a tax base that is too reliant on building materials and new car sales. More importantly, a big chunk of the expanded sales tax would be paid by out-of-state visitors to tourist-friendly Maine.

Opponents, who gathered the 55,000 signatures needed to put the referendum question on the ballot, have said they didn’t mind the income tax reduction, but they have argued that expanding sales taxes hurts Maine residents. New taxable categories such as car repairs, pet grooming and dry cleaning have drawn the most ire.

The reform bill also eliminated many income tax deductions and exemptions from the state’s tax code, something repeal supporters claimed would hurt businesses, although those deductions and exemptions were replaced by a refundable tax credit.

Maine Revenue Services had projected a $55 million reduction in tax burden for Maine residents and estimated that as many as 90 percent of Mainers would see a net tax reduction.

“We passed up an opportunity that may never come around again,” Sen. Perry said Tuesday night. “The worst part is, the yes side never came in to work on this, so I’d be interested to see if they have an alternative to tax reform.”

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