Editor’s note (June 18): Shortly after the original version of this column was published, the Maine House of Representatives voted against the biennial budget proposal, 77-71. The column has been updated (and the budget proposal has since been passed).
Just when you think you’ve seen it all, someone throws a curve ball.
The Democrats-only budget proposal — seemingly on a glide path to adoption on Wednesday — was upended by a morning revolt from the House rank-and-file, leaving party leaders a handful of votes short on the initial roll call.
Whatever happens next, a debate over the Maine Democratic Party’s future has already begun.
The spark? A proposed 75% increase in the cigarette tax, the major revenue raiser in the proposed biennial budget.
Leading the dissenters was Rep. Nina Milliken, a second termer from Blue Hill. In a passionate floor speech, she told colleagues, “This proposed budget is balanced on the backs of some of Maine’s poorest residents through regressive taxation … We owe it to our constituents to do better — to tax people who are super wealthy, so that the poorest people in our community see some relief.”
Milliken is harking back to her party’s historic role as a defender of working people against the combined forces of business and capital. If Democrats can’t stand up for the powerless – and our state’s smokers definitely qualify – who do they represent?
Republicans have been the party of business since the days of Abraham Lincoln. If Democrats can’t represent “the common man” and labor unions, they have only the support of often-discordant interest groups on the left, and these no longer produce a majority in national elections.
The status quo budget Democrats proposed reflects the views of Gov. Janet Mills, who twice campaigned against any and all tax increases. For awhile, that worked: Revenue flowed steadily pre-pandemic, then vigorously with the help of Biden administration aid. When federal money dried up, the question became what tax increases would maintain the spending Mills supported, including — and chief among those items — Medicaid expansion.
The tax Mills and the Legislature turned to was cigarettes, proposing to raise if from $2 a pack to $3.50 — a stunning 75% increase levied on, collectively, the poor people of Maine, many of them holding several jobs to make ends meet. This was the most regressive possible option, and a far cry from “taxing the rich” that Nina Milliken and her supporters advocate.
There are rationalizations for boosting tobacco taxes.
Maine was “second lowest in New England,” but it’s the only region to go beyond $2. At $3.50, Maine would have become seventh highest in the nation, just behind Massachusetts at $3.51.
“It hasn’t been raised in 20 years,” since doubling under the previous Democratic governor, John Baldacci. The appropriate response: So what? Income tax rates declined steadily down over the same period, and if there’s one thing Democratic voters unite around, it’s that the rich, benefiting from mammoth tax breaks, should pay more. Yet Maine’s Democratic legislators refuse to comply.
Finally, there are supposed “health benefits” from deterring smoking. It’s true that shock increases do reduce purchases, but the effect quickly fades. Nicotine is, after all, among the most addictive substances known to humanity.
And that isn’t the only sacrifice. Mills’ signature education program — free tuition at community colleges — will end, while the state is cutting back homeless funding.
The tragedy is that all of this could have been avoided. A little-noticed change two years ago has come back to haunt Democrats.
Tired of chronic underfunding of highway programs, and consequent annual $100 million bond issues beginning under LePage, Mills hijacked funds from sales and liquor taxes to prop up the ailing Highway Fund.
We got away with it once, since new revenue was abundant, but now it’s putting a $300 million hole in the General Fund. Advocates say sales taxes on vehicles should be diverted — no explanation about the liquor fund — but that’s like saying the even larger sales tax revenue stream from construction materials should fund new housing to meet that continuing crisis.
This money was raised for education, health care, environmental protection and other vital programs. It shouldn’t pay for roads simply because lawmakers refuse to raise the gas tax beyond the 30 cents a gallon it’s been stuck at for, yes, 15 years, following LePage’s repeal of indexing.
Unlike the cigarette tax, raising fuel taxes has indisputable benefits, including lowering vehicle miles — a long-time goal of environmental groups — encouraging other forms of transportation, reducing carbon emissions and honoring the traditional “pay as you go” philosophy we still use for turnpike tolls.
Raising the gas tax, one is told repeatedly, is “impossible.” Raising the cigarette tax is suspiciously easy.
Had this General Fund money returned to its proper place, the cigarette increase ($111 million) could vanish, with free tuition and General Assistance restored, and plenty of money left for programs near and dear to Democrats.
Instead, it remains to candidates for governor and the Legislature in 2026 to more closely align the party’s fiscal practices with its long-term policy goals. After this last and least biennial budget of the Mills years, it’s clear nothing of the sort will happen before then.
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