Maine people know how important education is for our kids and economy. A quality education increases the chance that children can grow up to experience more prosperous lives than their parents. A good education leads to a highly skilled workforce that is more productive, innovative and entrepreneurial. But you can’t get something for nothing. Recent studies affirm that more funding is crucial to cultivating better schools that deliver greater results for all students. To get the first-rate education system Maine needs, we have to find a way to pay for it.
Question 2 provides an opportunity to reverse the state’s underfunding of education. Since Maine voted in 2004 to require the state to fund 55 percent of education costs, lawmakers have enacted a series of tax cuts that overwhelmingly benefit wealthy Mainers, while reducing resources to meet the education funding obligation. As a result, the state still spends 3 percent less per student than it did before the recession.
In 2017, tax breaks enacted since 2011 will reduce state revenue by $297 million, ensuring the state will fall $171 million short of its 55 percent obligation. Don’t expect this situation to improve anytime soon. A memo from the governor’s office forewarns that the LePage administration will continue to fight for even more tax breaks for the wealthy in the upcoming biennial budget negotiations, further jeopardizing Maine’s ability to provide quality education for its students.
Question 2 would increase taxes on annual incomes over $200,000 — the wealthiest 2 percent of Maine households that benefited most from those recent tax breaks.
Opponents have focused on the impact this tax increase on Maine’s wealthiest might have on the state economy. But the research suggesting that a relatively high state tax rate on the wealthy hurts economic growth is limited and overshadowed more than two-to-one by studies that conclude higher state tax rates have insignificant, even positive impacts on economic growth.
Maine’s lackluster economic performance since the 2011 income tax cuts took effect provides evidence that lower taxes have done little to fuel our recovery. Maine’s job growth has lagged at 3.3 percent, compared with 8.6 percent nationally, and Maine’s per capita GDP is up only 0.6 percent since the tax cuts took effect, compared with 3.5 percent nationally.
While failing to deliver economic growth, these tax cuts have successfully hampered the state’s ability to invest adequately in roads and bridges, access to affordable health care and, above all, our kids’ education — investments that improve the quality of Maine’s workforce, lower business costs and improve long-term economic prosperity. They are also transferring more of the costs for these investments to lower- and middle-income Mainers through higher sales and property taxes. Question 2 would improve tax fairness by ending this shift and increasing the likelihood that wealthy Mainers pay just as much in state and local taxes, as a percentage of their income, as everybody else.
Even Question 2 opponents acknowledge the need to increase school funding. State per student spending is not keeping pace with the growing needs of Maine’s students. In the last eight years, the percentage of low-income students in Maine schools increased from one in three to nearly one in two. Schools need more resources to keep low-income students from falling behind. Poorer communities have less capacity to make up for the lost state funding in recent years. For Maine’s economy to thrive, all communities must have the resources to teach their students the skills they will need to succeed in the workforce.
Question 2 will raise $159 million in its first year, and it is forecast to increase in subsequent years. The state’s school funding formula will allocate this to increase funding for an estimated 94 percent of Maine students and provide additional resources to towns with high rates of low-income students and low property values. Opponents ignore the fact that Maine’s is one of the most equitable school funding formulas in the country.
Ultimately, Question 2 will raise revenue from Maine’s wealthiest 2 percent of households who currently pay an effective state and local tax rate lower than the other 98 percent of Mainers. All of the revenue raised will be invested in improving educational opportunities for Maine students.
We’ve waited long enough for the state to fulfill its obligation to fund education adequately and move Maine students to the head of the class. A “yes” vote on Question 2 is a vote for Maine students, a vote for tax fairness and a vote for the economy.
Sarah Austin is a policy analyst with the Maine Center for Economic Policy and primary author the report “ Moving Maine Students to the Head of the Class.”