DEMS FOR AND AGAINST Senator Dawn Hill has wealthy friends the budget will help.
Senator Dawn Hill, of Cape Neddick, the lead Democrat on the Legislature's Appropriations Committee, which fashioned the recently passed $6-billion state budget, explained to the Phoenix why she voted to reduce income and estate taxes on the rich while also voting for cuts in help to the poor and in teacher and state-worker pensions: "I have a lot of wealthy friends," she said, "and they do a lot of philanthropy."
Reducing income taxes, Hill added, also is "important to business."
The budget she helped craft has tax reductions that greatly benefit her friends. It drops the highest income-tax rate from 8.5 to 7.95 percent and establishes larger tax breaks. Although many low-income Mainers will no longer pay income tax, and a family making $50,000 will see its taxes cut by $250 in 2013, according to Maine Revenue Services, the wealthiest 10 percent of families will get 44 percent of the $155-million cut, with an average benefit of $3000 to those in the top one percent.
The estate-tax change expands from $1 million to $2 million the value of assets exempt from taxation, costing state government $51 million in revenue by the 2014-2015 fiscal years. New tax breaks for business will cost the state $57 million in the current two-year budget. In this period the tax-cut total will be $150 million, but in the next two-year budget it will account for a $400-million hit to the treasury.
Another powerful Democrat had good things to say about another major feature of the budget. House minority leader Emily Cain, of Orono, said in the Kennebec Journal that welfare reforms made "'significant improvements' and should be applauded," adding: "'I think this is a pretty good budget.'"
The welfare reforms include a provision requiring the Department of Health and Human Services (DHHS) to deny benefits to children, according to DHHS, if a parent didn't go to education classes, didn't document time spent volunteering, breaks an appointment with a welfare worker without "good reason," or otherwise breaks his or her "contract" with the state more than once. Another reform makes it impossible for many legal immigrants to receive Medicaid (MaineCare), the free health care for the very poor.
Hill's and Cain's remarks reflect the Democrats' unanimous approval in the Appropriations Committee and overwhelming approval on the House and Senate floor of the most conservative budget in anyone's memory — signed by Republican Governor Paul LePage on June 20.
Given that Maine has its most conservative government in memory, with Republicans controlling both houses and the governorship, the budget's passage is not surprising. But the Democrats' assent, with little protest, is. In fact, when LePage signed it, the House Democratic office issued a statement expressing relief.
Except the Democrats' assent really isn't surprising. They have accepted Republican economic policies for years. The eight-year reign of Governor John Baldacci, with complicit Democratic legislatures, resulted in business tax cuts, reduced state services for groups like the mentally ill, and 1000 fewer state employees.
Is compromise victory?
To be sure, Democratic lawmakers complained about budget provisions and other Republican legislation. More vociferously, though, they celebrated their ability to compromise. The Maine Sunday Telegram marveled that both parties fell "all over themselves praising the budget and the process that produced it."