Question 2 tax faces repeal, replacement effort

Lobbying begins to stop 3% tax increase for education.

AUGUSTA, Maine (NEWS CENTER) — One of the biggest battles of this legislative session officially kicked off Monday, as a series of five bills, most from Republicans, were presented to undo the 3 percent surtax law passed by voters in November as Question 2.

That law raises income taxes on individual incomes over $200,000 and uses the money to increase funding for K-12 schools. Supporters say it would let the state finally make good on the 12-year-old law, also passed by voters, to provide 55 percent of school costs. State government has never reached that level of funding.

Business advocates and business owners say the new tax is a bad advertisement for Maine because it gives the state the second-highest top tax rate in the country at 10.15 percent. They argue that it will make it difficult for businesses to recruit high-level workers, and will lead to a number of high earners and retirees leaving Maine.

Gary Serino is one of them. Serino is chief financial officer and vice-president of Maine Course Hospitality Group of Freeport, which owns or manages 18 hotels in Maine and other states.

» RELATED: The pros and cons of Question 2

Serino told NEWS CENTER that he was already considering retiring to Florida eventually, but has now decided to move there this year and “tele-commute" for his job at MCHG. He said the new tax would cost him a “significant” amount of money if he were to remain a Maine resident.  He predicts other in the states will make the same decision he’s made.

“People will be leaving the state as a result of paying this additional fee,” he said.

Supporters of the new law see it very differently. John Kosinski of Stand UP For Students, the group that led the successful referendum campaign, said the issues raised now by opponents were all heard during last fall’s campaign.

"And that’s what’s really discouraging about this process is that the voters spoke loud and clear at the polling place on Election Day and passed Question 2," said Kosinski, who said lawmakers trying to change or eliminate the new law were ignoring "the will of the people."

There are five bills being proposed. Some would simply repeal the law, while another would require the vote to be done over again, and yet another would raise the income threshold for the higher rate to take effect.

Business groups said they were supporting a bill by Senate committee chair Dana Dow, which would eliminate the 3 percent tax and increase funding for education using other taxes, including the new marijuana tax.

Copyright 2017 WCSH


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