The wrong man for hard times

By LANCE TAPLEY  |  February 4, 2009

It’s an understatement to say that Maine’s chief executive is not showing leadership on this issue. At a January 9 news conference announcing his latest proposals for massive cuts to state services, Baldacci said anyone talking now about broadening the sales tax was “putting the cart before the horse” — indicating that cuts should come first. Besides Republicans, his allies against tax reform once again would include the business lobby. “We need to control spending” before the tax structure is altered, Connors, the state chamber president, says.

Still, even without the effect of a changing national political mood, Baldacci will find Democrats in the Legislature feistier. His lobbying against tax reform two years ago irritated many. And in the last two years of his second term, he is a lame duck. Legislators have little to gain politically from him, especially since he won his second term with only 38 percent of the vote and has said he won’t run for office again.

On the other side of a tax-reform confrontation with Baldacci, however, would be politicians with a future. Besides Mills, who ran for the Republican nomination for governor in 2006 and may run again, there is Piotti, considered one of the Legislature’s brightest lights, and House speaker Hannah Pingree, who at 32 may have a lengthy political prospect indeed.

“We’re going to push again for a major effort to change, to broaden, the sales tax,” Pingree says in an interview. Whether the effort will include lowering the income tax is “a good question,” she adds, intriguingly.

There, too, is another of those liberal notes. Pingree says, without apology, that she sees herself as a member of the “progressive caucus” (a generic name rather than an organization).

And she says she wants to look at the Department of Economic and Community Development’s report on the value of business tax breaks, due in March, for possible use in fashioning the budget. “The pain needs to be shared,” she remarks.

Even Bill Diamond, the conservative Democratic senator who heads up the Appropriations Committee, repeats a phrase commonly heard among Democrats discussing the budget: “Everything is on the table.”

But is it? “Revenue enhancement,” as raising taxes is delicately phrased in Augusta, still seems a stretch for Democratic leaders. No one at the MECEP conference, for example, broached the idea of using the income tax (for example, by creating a new top income-tax bracket) to dig into where the money really is — where it has gone over the past 30 years: the pockets of the rich. They’re okay to target, says Obama, but raising income taxes on them or the corporations is probably too radical still for Maine Democrats, be they legislators or governor, even as the Age of Obama begins.

This conclusion can be inferred from the audience reaction to the final speaker at the MECEP conference. Robb Gray, of the Center on Budget and Policy Priorities, citing economists Joseph Stiglitz and Peter Orszag (the latter now Obama’s budget director), suggested to the assembled, overwhelmingly Democratic legislators, bureaucrats, lobbyists, and activists that in a recession “the last thing you should do is cut services,” putting people out of work and making the recession worse. (For more on this subject, see “Hey Guv: Stop Slashing!” by Lance Tapley, December 31, 2008.)

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