AUGUSTA, Maine — When you fill out your state income tax form, you are given the opportunity to contribute to political parties or seven different charitable causes. The majority of the Legislature’s Taxation Committee has proposed those checkoffs be eliminated and the public gets to weigh in on that idea this week.
“Very few people, less than one half of one percent of taxpayers, use these checkoffs,” said Rep. Gary Knight, R-Livermore Falls, co-chairman of the panel. “I have made it clear I want to get rid of all of them.”
The committee decided last month to report out legislation that would repeal all of the checkoffs after considering proposals to add more of the checkoffs to the tax form. The measure would stop the checkoffs at the end of tax year 2013. Panel members say the checkoffs have never been widely used.
Statistics compiled by Maine Revenue Services indicates that in 2011 all of the checkoffs combined raised $164,340 from the 641,445 returns filed by taxpayers. In that year there were 14,042 contributions through the tax forms — ranging from no contributions to the Reform Party to $33,332 in contributions to the Maine Endangered and Non-game Wildlife Fund.
Maine Revenue Services estimates every new line added to the tax form costs about $16,000. Several panel members pointed out several of the checkoffs generate less money for the charity than it costs to have it on the tax return.
“The state should not be collecting contributions for charities,” Knight said.
The committee was not unanimous on the issue. Rep. Seth Berry, D-Bowdoinham, argued contributions have decreased over the years because the location of the checkoff form went from the front page to a separate schedule on the tax return.
“There was a dramatic drop off when that happened,” he said. “One went from just over $117,000 to $45,000. These are very valuable efforts from these groups; some that help reduce state costs, like the Lung Association.”
Berry said all of the groups receiving funds through the income tax form are worthy causes. He agreed deciding which charities are able to use the tax form to gather contributions are difficult, but said that is the responsibility of the Legislature.
“This is the wrong way do to it,” said Rep. Paul Waterhouse, R- Bridgton.
He said government should not be using the tax code to collect contributions for charities, even if they are worthy causes. He would support eliminating the political party contributions immediately.
“I don’t think we are going to hurt too many people by telling everybody they don’t have to check off political parties,” he said. “I don’t think you are going to see a lot of people back home come running up here to protect that checkoff for political parties.”
In 2011 only 1,885 Mainers contributed a total of $18,358 to the four political parties. According to the latest figures from the Secretary of State’s office, there are 917,324 registered voters in Maine with 582,170 belonging to a recognized political party.
Rep. Ryan Harmon, R-Palermo, wanted to remove the political parties to allow additional lines on the tax form to help worthy causes. He suggested the possibility of allowing charities to rotate on the tax form to help raise funds for good causes.
“Get the political parties out so we can do something ethical and say put cancer screening on the form,” he said.
But Rep. Mark Bryant, D-Windham, argued there are far too many good causes that could benefit from being on the tax form and deciding which group is listed is mission impossible.
“Let’s stop the slide because there is no end to it,” he said. “There are so many organizations that I would like to see on there, there is no real end to it so let’s stop it now.”
Panel members questioned with more tax returns being filed electronically if there would be a point in the future when there would be little or no cost to add the opportunity for contributions to charities. Maine Revenue Services responded there are programming and processing costs even if printing costs are reduced.
The committee holds a public hearing on the bill 1:30 p.m. Tuesday, Feb. 28 in the State House.