Maine firms fear budget will add new taxes, fees
12/22/08 | 15 comments

Maine firms fear budget will add new taxes, fees


By Mal Leary
Capitol News Service

AUGUSTA, Maine — Gov. John Baldacci’s pledge of no tax increases to balance the new two-year state budget has done little to alleviate fears in the business community that they will be hit with taxes and fees to help balance the budget.

“We welcome the governor’s comments,” said Maine State Chamber of Commerce President Dana Connors. “And I am pleased with the comments I have heard from legislative leaders in discussions with them. But there is a real concern that the business community could find themselves paying more taxes or fees or fines to balance the budget.”

He said the magnitude of the state budget problems over the current year extends into the next two-year budget and that means lawmakers will struggle to make cuts and find revenues to fund state government.

“We have to be concerned and realize everything will be on the table as everyone struggles with the budget,” Connors said.

Tony Payne, executive director of the Alliance for Maine’s Future, a business-funded advocacy group, said businesses not only are worried, many are angered at lawmakers who are already talking about raising taxes or fees.

“We think the voters sent a clear message that they are fed up with taxes,” he said. “But businesses are hearing that there are lawmakers that are talking about raising taxes and they are upset about it and concerned.”

Payne said voters repealed the tax on beverages last month by a nearly two-to-one ratio and lawmakers should have gotten the message. All 16 counties repealed the taxes by wide margins.

Jim McGregor, government relations director for the Maine Merchants Association, said members of the business community are very worried that they will be hit with much of the cost of balancing the budget. He is not convinced lawmakers have heard the same message from voters that the business community heard in the beverage tax repeal.

“That is the question,” he said. “Did they hear the message that people are truly fed up with taxes or will they support some taxes or fees?”

McGregor also is concerned that fee hikes will be used as a “back door” tax increase on businesses. He said a number of state agencies that are funded by fees on the businesses they regulate saw the surplus funds they had built up “swept” into the state’s general fund to help fund other programs.

“Fees have become taxes in many ways,” said David Clough, Maine director of the National Federation of Independent Businesses. “My members say the foremost issue is the economy and hanging on to their businesses, then when they think about the state budget they are concerned about tax increases and fee increases.”

Clough said there have been many new fees and fee increases in recent budgets because they seem easier to get passed than a tax. He said a fee should be directly tied to the cost of a service being provided.

McGregor said while Baldacci has said he will not support a tax increase to balance the state budget, he signed the beverage tax increase last spring that the voters repealed.

“We have to worry that everything is on the table no matter what is being said publicly,” he said.

Clough said there also is concern that programs and tax breaks that have helped businesses grow and expand will be cut or eliminated. He said too many lawmakers do not understand that it is the private sector that creates the jobs that grow the economy.

“Each time there is a budget problem, they always threaten to cut back on business investment incentives,” he said. “You do that, and you weaken the economy, and our economy is already weak.”

Connors said there have been several attempts to cut important business programs, such as the Business Equipment Tax Reimbursement program that reimburses some businesses for the personal property taxes levied by local cities and towns. Most states have abolished that tax, and he said the tax put Maine at a disadvantage when a company would consider locating here because it adds to the already high cost of doing business in the state.

“And they have been successful getting rid of some,” McGregor said. “They took BETR away from retailers, and they are a big part of Maine’s economy.”

A wide variety of tax incentives have been created to encourage economic development, and many in the business community fear those will be cut or eliminated.

“What they really need to do is to bring the cost of state government into line with the ability of individuals and businesses to pay for it,” Payne said. “Our government costs too much.”

Baldacci will propose his two-year state budget on Jan. 9, and it is clear a lot of business owners will be watching a lot more carefully than they have in the past.

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Comments
15 comments on this item
On 12/22/08 at 5:09 AM, Govt2Big wrote:         Repeated separate thumbs down will cause comment to be hidden

We should all be afraid of new taxes and fees, because the Baldacci administration's spending habits are still out-of-control and they're being managed by spineless directors and commissioners...we're heading for 100% socialism. Sad but very true.

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On 12/22/08 at 6:29 AM, Lorrie wrote:         Repeated separate thumbs down will cause comment to be hidden

"They" tried to have J.F.K. introduce 'New World Order' he wouldn't. New World Order isn't about world peace or it would have been called World Peace. Clinton's last words were New World Order. The biggest problem is people who are lazy, who have their hands out for a free ride and when they don't like something rather than stay away from it and keeping their kids away from it they turn to the government and want eveything "against the law" Govt2Big is right. I hear they have more freedoms and rights in Germany then here.

Read up on the Bilderbergers maybe that will move a few people to start voting against making everything against the law and oust those who are trying to force us into socilaism

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On 12/22/08 at 6:33 AM, Tikitorch wrote:         Repeated separate thumbs down will cause comment to be hidden

Govt2Big I agree.. It is pretty bad!! He is now taking money from ESSESSENTIAL programs that are for EVERYONE in the State to fund PET PROJECTS which help Oh say 500+/-families via DIRIGO.... We just can't afford Dirigo, especially they way he has it set up. I know a husband and wife that are on this and they say it doens't cover much..... They pay $800 a month EACH and get a rebate each month of $200 each... So for each of them they get "overbilled" $200 each... it just does not make sense... in any way,shape or form.

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On 12/22/08 at 6:38 AM, LarrySG wrote:         Repeated separate thumbs down will cause comment to be hidden

There he goes again! We will have to call FEMA because of the flood of tears from Mr. Connors and the Maine Chamber. Businesses should all be issued guns so they can rob the customers legally. The CEO of Bank of America will be paid less this year because of an eleven percent pay cut, he'll have to "get by" on just a little over fourteen million dollars, poor business. Corporations pay only three percent of the federal tax income but even that is too much for the greedy jerks. Even if taxes do get increased the customer will just pay more, please Mr. Conners give us a break from your ever present flood of tears!

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On 12/22/08 at 7:15 AM, downbeat wrote:         Repeated separate thumbs down will cause comment to be hidden

Gov't to big is right and Larry SG has no clue what is is like for small business to be in Maine...I have less than 10 employess and companies like ours pay the bills in this state...i am not a member of the Chamber but he is the only voice that gives a crap about allowing our business to stay alive...The Legislature is our problem as they added all kinds of pet programs when the $ was rolling in..they should have set aside reserves tfor the core programs we must provide and set priorities.. maine goverment will be downsized but now it will be forced on them...not a good way to deal with problems..

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On 12/22/08 at 7:32 AM, LarrySG wrote:         Repeated separate thumbs down will cause comment to be hidden

Downbeat: I do have a clue, I was part of a two man business (in Maine) we paid bills and taxes. I am not against business I am not in favor of the "you owe me" attidtude. The idea that Maine is bad for, or on, business has just plain gotten out of control. I don't believe that the State is making an effort to overtax or shut down any business. My idea is that we should all, person and business, pay our fair share. That being said there is a lot of waste at all levels of government, some more than others, that needs to be stopped, and in Maine the state government need very badly to downsize, we don't need 235 members of the legislature, we don't need multiple levels of administration in the University System, the governor dosn't need more assistants than you can count on the fingers of both hands.

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On 12/22/08 at 8:21 AM, Coolfusion wrote:         Repeated separate thumbs down will cause comment to be hidden

The Maine Maritime Academy, a country-club school of 900 students (of which 1/2 are from out of state) and more than 1/2 are engaged in studies not related to their charter doesn't need a lobbyist in Augusta and a full entourage of spokespersons and public ralations staff when essential Maine services are being cut severely.

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On 12/22/08 at 10:09 AM, downbeat wrote:         Repeated separate thumbs down will cause comment to be hidden

Larry g i agree with you...I don't want the state to owe me anything.. just be responsible with the taxes i pay and treat me fair...

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On 12/22/08 at 10:44 AM, David889327 wrote:         Repeated separate thumbs down will cause comment to be hidden

Coolfusion:MMA is one of the most highly respected institutions in Maine.

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On 12/22/08 at 11:39 AM, sux2beeu wrote:         Repeated separate thumbs down will cause comment to be hidden

“Our government costs too much.” Baldacci NEEDS TO GO!!!!!!! IT"S TIME!!!!! THIS IS ONE REASON I LEFT MAINE.

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On 12/22/08 at 11:40 AM, Tikitorch wrote:         Repeated separate thumbs down will cause comment to be hidden

Coolfusion and just how much do the out of state people pay in Tuition.. I am sure it is way higher than most Colleges... AND quite a few of them root here after they graduate. It is nice to have an institution like MMA in these parts. It brings a little dignity to an area know mostly for Fishing and drugs!

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On 12/22/08 at 12:18 PM, Silverado wrote:         Repeated separate thumbs down will cause comment to be hidden

My brother always said "tax toilet paper"! Everyone uses it and everyone will have to pay their share!

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On 12/22/08 at 1:14 PM, CeeBlue wrote:         Repeated separate thumbs down will cause comment to be hidden

When 'Davy and the boys' realized the E. wall had been breached and Santa Anna's men we're pouring in -- it was over.

They might have escaped; to fight again--but instead --- even though the outcome was inevitable----to the last man they died.

My Friends--you have lost: Sierra Club Et al and The Baldacci Gang have ''won''----.

There are places in the great country where hard work/fiscal responsibility/ sensible regulation exist--and thrive.

** Did I mention sunshine--.

Think AZ. I only wish I had left 15 Yrs. sooner.

Maine: a great place to be from--.

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On 12/28/08 at 5:58 AM, UnhappyTaxpayer wrote:         Repeated separate thumbs down will cause comment to be hidden

Tax and spend. The Baldacci / Democratic way. I do not believe that the message was heard by our legislature. Even Hannah Pingree indicated that she felt that the vote against the beverage tax was not really what the people wanted. It is this myopic view that will get us into trouble. We as a state can not afford any more taxes or fees. The way to prosperity for the state is to encourage new businesses and investors not discourage them with high taxes , fees and regulations.

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On 1/2/09 at 12:23 PM, JonAlbrecht wrote:         Repeated separate thumbs down will cause comment to be hidden

Baldacci's budgets have been consistent with TABOR since it was defeated. So all this writing about Tax and Spend is just nonsense. These folks will not be satisfied until taxes are zero and they can abuse their employees and communities while receiving corporate welfare. As for socialism, ignorance is no substitute for stupidity.

1. Repeal all business tax avoidance schemes.

2. Establish a minimum corporate income tax rate.

3. Then cut $60 million in state spending by firing the unnecessary administrative employees as recommended by the Brookings report.

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