Kathleen Chase, Maine State Representative

GOP response to governor's weekly address for June 27-28, 2009

2009-06-27T17:03:00.002-04:00

Republican response to the governor’s weekly radio address for the weekend of June 27-28, 2009

Greetings, this is Kathy Chase, State Representative from Wells. It is my honor to deliver the Republican (radio) response this week.

On June 11th, the Maine Legislature passed the most radical tax overhaul in 40 years. More specifically, the Legislature’s Democrats passed it, because in the House, not a single Republican voted for it. The next day, Governor Baldacci signed the bill into law. And now a drive to repeal this law is under way in hopes of killing it before it would take effect on January 1st.

Last year, another big Democratic tax increase on beer, wine and soft drinks was easily defeated by a people’s veto. The plan this year is for a repeat performance – to get another referendum on the ballot in November so the people have the final say on whether they want this massive expansion of the sales tax.

It’s unfortunate when Maine voters have to keep fixing the damage done by the Legislature, but at least we have the constitutional right to do it. And in this case, we would be negligent if we allowed such a flawed law to remain on the books. A coalition called Still Fed Up With Taxes will lead a petition drive to collect the required number of signatures, about 55,000. If they succeed, voters will have a choice. If they fail, this regressive and expensive tax will become the law of the land.

As a member of the Taxation Committee, I watched this legislation evolve for months. The basic idea is to lower Maine’s top income tax rate of 8.5 percent to 6.5 percent and pay for the lost revenue with an expansion of the 5 percent sales tax to a vast new array of services and activities. The whole list takes up several pages. It also would export $55 million to tourists by jacking up the meals and lodging tax to 8.5 percent. Mainers will pay the higher meals tax, too, of course, which will likely have an adverse effect on restaurants.

That is the plan as it stands. In theory, the tax shift would be revenue neutral – the state would still take in the same amount of money. And also in theory, the plan would treat taxpayers equally – what they paid out in additional sales tax would be cancelled out by the income tax cut.

That goal of taxpayer equality is already out the window. According to an analysis by Maine Revenue Services, some 85,000 Maine families will be losers in this new tax system that resembles a game of tax roulette.

Republicans opposed this plan because we thought it was irresponsible to totally transform the tax system during a period of fierce economic turmoil. The impact on state revenues is too unpredictable right now and could set the stage for greater budget problems.

We opposed it also because it really hammers older Mainers living on fixed incomes. A couple surviving on Social Security pays little, if any, income tax; so they won’t get the benefit from the income tax reduction. However, they will face the sales tax on a huge number of services, things like car repairs, movies and even house cleaning. If they decide to move to Florida to escape Maine winters and taxes, the state will hit them on their way out the door by taxing moving services.

Newspapers are now running letters to the editor from older Mainers who have figured out how this new system will affect them. They will be among the losers in a tax overhaul so complicated that most legislators probably don’t even understand it, especially the ones who voted for it. Why else would Democrats approve a plan that punishes older Mainers so severely, especially Mainers who have lived here for years and paid the state’s high taxes throughout their careers? Now that they are entering their golden years of retirement, along come the Democrats to get at their money one last time.

Low-income Mainers of all ages will take a hit. Maine’s income tax brackets range from 2 percent to 8.5 percent. Under this plan, all brackets will be eliminated and a 6.5 percent rate will apply to everyone. The plan also eliminates the standard deduction. Maine’s progressive tax system would be replaced by a complex scheme of household credits that may or may not work as the authors envisioned. We do know that the credits will phase out as one’s income rises.

It’s also disturbing that the final plan seems to have been changed by politically connected insiders and special interests to remove taxes on activities enjoyed mostly by affluent residents. The first plan passed by the Democrats in early June included sales taxes on golf greens fees and ski lift tickets. The governor refused to sign that bill and came back a week later with a revised version, LD 1495. The tax on greens fees and lift tickets was gone, but the tax on miniature golf was still there. So golfers on the real courses are protected, but the hammer falls on kids playing mini-golf. The governor also wiped out the increased property transfer taxes on houses selling for more than $500,000.

The Democrats always claim to stand for the little guy. In this case, ironically, they stood up proudly for the affluent while throwing retirees and the working poor under the bus. It’s too bad more deserving services didn’t have the same kind of lobbying muscle as the golf and ski industries. The governor didn’t eliminate taxes on diaper services or car repairs. He left in the taxes on repair of shoes and clothing, on rug cleaning and car washes and countless other basic services used by hundreds of thousands of Maine residents.

This so-called tax reform plan never should have passed. Now that more Mainers are discovering the damage it does, a backlash is setting in. We can only hope that the repeal provision gets on the ballot and the voters will veto yet another monstrosity to emerge from the State House.

This is Kathy Chase. Thank you very much for listening.

GOP response to governor's weekly address for May 30-31, 2009

2009-05-31T21:58:00.000-04:00

Republican response to the governor’s weekly radio address for the weekend of May 30-31, 2009

Greetings, this is Kathy Chase, State Representative from Wells. It is my honor to deliver the Republican (radio) response this week.

The battle of the budget is over in Augusta. State spending has been set for the next two years, unless adjustments are required later on. In the Legislature, attention is now turning to the remaining bills, such as LD 1088, an effort to overhaul Maine’s tax laws.

I’ll elaborate on the details in a moment; but basically it trims the income tax rate and expands the sales tax to a vast range of services, including car repairs, movie theaters and sporting events. The sales tax on meals and lodging would jump from 7 percent to 8.5 percent. Tax filers who itemize deductions will instead be given a household tax credit. That means no more deducting of mortgage interest or property taxes. Proponents of the bill claim that the total tax will rise for less than 20 percent of Maine residents. For the rest, the tax burden supposedly would fall.

As a member of the Taxation Committee, I have been closely involved with this bill since January. In the last Legislature, I worked on an earlier version, which went down to defeat. The current bill, like the last one, is called revenue neutral, because in theory the state will still collect the same amount of tax money. A less flattering description is lift-and-shift, meaning the state will lift some taxes and shift the balance by lowering others. One thing is clear. This tax reform does not reduce the state’s total tax burden. It restructures the tax code, and the results are by no means certain. The rule of unintended consequences could easily come into play, especially with the economy in turmoil.

A partisan battle is shaping up inside the State House. Democratic legislators favor this bill; their leaders in both chambers are co-sponsors. The primary sponsor, Representative John Piotti, is the leader of the House Democrats; and he is passionate about his cause. He believes that by broadening the sales tax to include services, the state’s revenue base will be sturdier and more resilient during economic downturns.

That’s a plausible argument; but the plan is certain to annoy the people paying the tax, not to mention the bookkeeping headaches it would create for the thousands of small businesses who would have to collect the tax and file reports with the state. That’s why 80 percent of small business owners oppose LD 1088, according to a poll by the National Federation of Independent Business. The Maine State Chamber of Commerce also has turned thumbs down. And a recent survey of 400 Maine adults by the Pan Atlantic Group indicates that the public rejects the plan by a two-to-one margin.

There’s a lack of trust in the people who control the Legislature – a suspicion that once they spread the sales tax to nearly every activity in the state, the majority party will raise the income tax again if tax revenues come up short. The Maine House has been run by the same party for 35 years and their record on taxes does not exactly inspire confidence.

Republicans have serious concerns with the proposal. We like the reduction of the top income tax rate to 6.5 percent. Our current rate of 8.5 percent is one of the highest in the country and it discourages business investment. Our own plan would gradually drop the top rate to 4.5 percent, well inside the American mainstream.

One of our major worries is the timing. The economic situation is too chaotic to embark on major tax surgery. Even though we just passed a two-year budget, there are fears that revenues could fall substantially below projections by the fall. If we can’t accurately forecast how much revenue the state will bring in next year under our current system, imagine trying to make that prediction under a new, untested system during this wild economic turbulence.

Let me highlight a few of the tax changes under this reform plan. Raising the meals and lodging tax from 7 percent to 8.5 percent would be a tough blow to restaurants and innkeepers already battered by the recession. It also would be tough on their customers, including many Mainers.

The plan also levies taxes on installation, repair and maintenance of all kinds of everyday items – from office equipment to shoes to firearms. The big one is car repair. In a poor state like Maine, the average car is seven or eight years old. Drivers are trying to keep them on the road as long as possible. Repairs are costly, and the last thing Mainers need right now is a sales tax on top of those big bills.

Entertainment and recreation would be taxed – movies, concerts, sporting events, water parks, historic sites, carnivals and even petting zoos. Sports and games, too – golf greens fees, ski lift tickets, bowling alleys, pool halls, tennis courts, swimming pools and even go-cart courses.

I could go on and on – dry cleaning, diaper services, interior decoration, boat mooring and moving services. The problem with these tax targets is that they would turn thousands of small business people into tax collectors for the state, complete with all the accounting headaches and hassles that would come with more complicated bookkeeping.

Maine’s tax burden needs to come down. But it should happen when the economy stabilizes, and it should make the system less complicated, not more. Stay tuned for a decision on this issue. The vote should come next week.

This is Kathy Chase. Thank you for listening.

GOP legislators move to protect laid-off workers from taxes

2009-03-31T20:26:00.001-04:00

House & Senate Republican Office
_______________________________________________________________________
FOR IMMEDIATE RELEASE For more information:
March 25, 2009 Jay Finegan, 297-1445

GOP legislators move to protect laid-off workers from taxes

AUGUSTA – State Rep. Kathy Chase and State Sen. Richard Nass announced today that the Joint Standing Committee on Taxation has approved an emergency provision to a bill that would exempt severance pay from the Maine income tax. The emergency preamble to the legislation means that it would take effect immediately after being enacted by the Legislature and signed by the governor.

Ordinarily, a new law goes into effect 90 days following the recess of the legislative session, which is scheduled this year for June 16. Without the emergency provision, the bill wouldn’t take effect until September. “That’s not fast enough,” said Sen. Nass (R-York). “When you have to pay a mortgage and provide food for your family, you need relief immediately.”

.”In this current recession, with so many families losing their incomes, there is no time to waste,” said Rep. Chase (R-Wells), the ranking Republican on the Taxation Committee.
“We expect this bill to pass, and we want it to take effect right away. With the closing of the RR Donnelley plant, 374 employees will be out of work. I just find it unacceptable that the state would move in and take a big chunk of a severance check, which might be the only money left to support a family.”

The bill, LD 197, is entitled “An Act to Provide Tax Relief to Workers Who Lose their Jobs Due to Business Closure.” It is sponsored by Rep. Gary Knight (R-Livermore Falls) and designed to shield severance pay from Maine’s 8.5 percent income tax. The bill, complete with the emergency preamble, passed the Taxation Committee unanimously on March 24. The committee added an amendment to limit the income tax deduction to three years.

Rep. Chase and Sen. Nass attended a meeting in Wells with Governor Baldacci and Wells town officials after the shocking announcement of RR Donnelley’s planned permanent closing of its Wells plant. Sen. Nass represents Wells as well as surrounding towns where some of the employees of RR Donnelley reside.

“Every person losing their job at RR Donnelley wants another job,” said Rep. Chase. “These are not folks who want to rely on the government for support. Yet it is during difficult times when the Legislature must step in and be sure that we support hard-working Maine people who need help until they find employment. I am confident that the full Legislature will move swiftly to pass this legislation to help folks who find themselves out of work through no fault of their own.”

FOR IMMEDIATE RELEASE
March 25, 2009
For more information: Jay Finegan, 297-1445

Medicaid Bombshell Rocks State House

2009-03-31T20:24:00.000-04:00

Medicaid Bombshell Rocks State House

By Rep. Kathy Chase

On the night of March 10, I watched in the House Chamber as Governor John Baldacci delivered his State of the State address. The governor tried to sound an uplifting note, predicting a brighter future for Maine. He never uttered a word about a ticking time bomb in the MaineCare program, the state’s name for Medicaid.

Three days later, on Friday the 13th, the bomb went off. Baldacci administration officials told key legislative committees that MaineCare was running a $235 million deficit for fiscal 2009, which ends June 30.

The news sent shock waves through the State House. Legislators are already dealing with an $800 million shortfall in the upcoming 2010-2011 budget. A giant leak in MaineCare posed a huge problem. And that wasn’t all. The Department of Health and Human Services (DHHS) forecasts more MaineCare overruns for the next two years, to the tune of $90 million in 2010 and $65 million in 2011. These are simply guesses, of course. If Maine’s economy continues to deteriorate, the real numbers could be even worse.

Once the dust settled on March 13, the inevitable questions began to surface. What did the governor know and when did he know it? If the problem had been building for months, why were legislators not told in late January, when we passed a supplemental budget that cut spending by $140 million? Did the governor and his minions conceal the bad news until after his State of the State address?

In the immediate aftermath of the bombshell, administration staffers scrambled to downplay the damage. What’s the big deal, they seemed to say – it will all be covered with stimulus cash. They also intimated that DHHS had hinted for weeks that MaineCare usage was on the rise. But certainly no Republicans on the budget-writing Appropriations Committee had gotten the word that MaineCare had spun completely out of hand; nor had Republican leaders in the House and Senate.

State Senator Kevin Raye, leader of the Senate Republicans, was incredulous. “It’s doubtful the administration became aware of a $235 million hole only in the last few hours,” he said that night. Rep. Josh Tardy, leader of the House Republicans, was equally skeptical. “It’s hard to believe the administration did not know we were $235 million out of balance,” he noted, “with just three months to go in the fiscal year.”

Republican Senator Richard Rosen, a thoughtful member of the Appropriations Committee, said he expected a MaineCare shortfall in the $10 million range, because demand for the service rises in a sinking economy. But nobody was remotely expecting $235 million.

If the Baldacci administration deliberately misled Republican legislators, it is no small thing. The watchword around the State House this session is transparency. Everything is supposed to be out in the open – the good and the bad – so we can work together to solve the budget crisis. Judging by the reaction of legislators on my side of the aisle, any sense of trust has been badly damaged.

The task now is getting control of MaineCare before it wrecks the state’s finances. It’s true that the stimulus windfall will pay for this mess. Maine will take $65 million in stimulus money and use that to leverage a federal match of $170 million. Stimulus money also will help cover shortfalls in the next two years. But the stimulus bonanza ends in 2011, and the problem of an extremely costly MaineCare system will remain.

MaineCare is an entitlement program, funded with a combination of state and federal money. It provides free medical and dental care to low-income residents. Approximately 270,000 Maine citizens are enrolled in the program, making MaineCare the second largest Medicaid program in the country as a percentage of population. It also is very lenient. Those on MaineCare can make much more money than people in other states and still qualify for full benefits.

None of this comes cheap. MaineCare runs on an annual budget of about $2.4 billion. It absorbs 20 percent of the state budget, costing Maine taxpayers more than $1.2 billion every budget cycle.

The most stunning fact is that MaineCare recipients, on average, rack up more than $8,800 in medical charges every year. That’s 90 percent above the national average for Medicaid spending. We cover virtually everything, even rides to a doctor’s office. We hear anecdotally of recipients who see doctors 100 times a year or more, and of people moving to Maine temporarily for costly medical procedures not covered by Medicaid in their home states.

If MaineCare operated at the national average in cost per recipient, we could retain all 270,000 people and still save about $1 billion a year. With the state-federal formula, Maine taxpayers would save some $340 million. That would provide a stimulus program that really could work.
We cannot afford a “Cadillac” Medicaid system any longer. It is squeezing out many other critical state needs, including road maintenance and higher education.

The huge MaineCare cost overrun was a wake-up call. In the interest of fiscal sanity, the Baldacci administration needs to work with legislators to curb this runaway program. Only by reforming MaineCare can we assure services for those most in need, at a cost Maine taxpayers can afford.

Rep. Kathy Chase (R-Wells) is the ranking Republican on the Taxation Committee

LD 661-- "Resolve, to Provide Equitable Tolls on the Maine Turnpike"

2009-03-09T12:03:00.002-04:00

Representative Kathy Chase has sponsored the following bill slated for public hearing on March 20th with the Transportation Committee at 10 a.m. in room 126 at the State House.

LD 661-- "Resolve, to Provide Equitable Tolls on the Maine Turnpike".

Sec. 1 Equal cost per mile for commuter pass users. Resolved: That, beginning January 1, 2010, the Maine Turnpike Authority shall implement a method of toll collecting that levies a standard and equal cost per mile for the miles driven on the Maine Turnpike by drivers using a commuter pass, also known as an E-Z Pass. Failure to do so will result in the rollback of turnpike tolls to the schedules used in fiscal year 2007-08, which must remain in effect until such time as the Maine Turnpike Authority demonstrates to the joint standing committee of the Legislature having jurisdiction over transportation matters that the standard and equal cost per mile driven rate for drivers using a commuter pass has been implemented.

SUMMARY
This resolve requires the Maine Turnpike Authority, beginning January 1, 2010, to implement a method of toll collecting that levies a standard and equal cost per mile for the miles driven on the Maine Turnpike by drivers using a commuter pass, also known as an E-Z Pass. Failure to do so will result in the rollback of turnpike tolls to the schedules used in fiscal year 2007-08, which must remain in effect until such time as the Maine Turnpike Authority demonstrates to the joint standing committee of the Legislature having jurisdiction over transportation matters that the standard and equal cost per mile driven rate for drivers using a commuter pass has been implemented.

Our current tolling system is inequitable. We in the southern Maine area pay a much higher cost per mile then other areas in Maine. This bill will require the tolls to be the same price per mile for those with E-Z pass, regardless of how far or where or what direction someone travels. Right now the cost per mile to travel the entire length of the Turnpike (Wells to Exit 102) is about 70% per mile cheaper than it is to travel from Wells to York. And the cash price to travel from Wells to Exit 102 is the same cost as it is for the E-Z pass ($4). So anyone can travel whether cash or E-Z pass the entire length from Wells to Exit 102 for 70% of the cost per mile it would be to travel from Wells to York with the E-Z pass discount.

End bill summary.

Everyone’s help is needed to get this bill passed. Together we can get equity in our tolls through the E-Z pass system. Your help would be greatly appreciated. Please pass on to anyone who may be interested.

* Contact me if you would be willing to testify: 468-0747 or email kathydhchase@hotmail.com <mailto:kathydhchase@hotmail.com>

* Write a letter of support that I can read when I testify. It does not have to be fancy, just why you believe we should have equitable tolls.

* EMAIL THE MEMBERS OF THE TRANSPORTATION COMMT WITH YOUR COMMENTS. To: kathie.bilodeau@legislature.maine.gov <mailto:kathie.bilodeau@legislature.maine.gov>
Transportation Committee Clerk: Kathie Bilodeau kathie.bilodeau@legislature.maine.gov <mailto:kathie.bilodeau@legislature.maine.gov>
Senator Dennis S. Damon (D-Hancock), Chair <http://www.maine.gov/legis/senate/senators/bios/bio28s.htm>
Senator Joseph C. Perry (D-Penobscot) <http://www.maine.gov/legis/senate/senators/bios/bio32s.htm>
Senator Walter R. Gooley (R-Franklin) <http://www.maine.gov/legis/senate/senators/bios/bio18s.htm>
Representative Edward J. Mazurek (D-Rockland), Chair <http://www.maine.gov/legis/house/hsebios/mazuej.htm>
Representative George Hogan (D-Old Orchard Beach) <http://www.maine.gov/legis/house/hsebios/hogagw.htm>
Representative Ann E. Peoples (D-Westbrook) <http://www.maine.gov/legis/house/hsebios/peopae.htm>
Representative Charles Kenneth Theriault (D-Madawaska) <http://www.maine.gov/legis/house/hsebios/therck.htm>
Representative Charles W. Harlow (D-Portland) <http://www.maine.gov/legis/house/hsebios/harlcw.htm>
Representative Michael E. Carey (D-Lewiston) <http://www.maine.gov/legis/house/hsebios/careme.htm>
Representative William P. Browne (R-Vassalboro)* <http://www.maine.gov/legis/house/hsebios/browwp.htm>
Representative Douglas A. Thomas (R-Ripley) <http://www.maine.gov/legis/house/hsebios/thomda.htm>
Representative Richard M. Cebra (R-Naples) <http://www.maine.gov/legis/house/hsebios/cebrrm.htm>
Representative Kimberley C. Rosen (R-Bucksport) <http://www.maine.gov/legis/house/hsebios/rosekc.htm>

Rep. Kathy Chase takes lead role on Taxation Committee

2009-03-05T08:06:00.000-05:00

York County Coast Star
March 05, 2009 6:00 AM
http://www.seacoastonline.com/articles/20090305-NEWS-903050375

Rep. Kathy Chase takes lead role on Taxation Committee

AUGUSTA — State Rep. Kathy Chase, R-Wells, has been named the Republican lead on the Joint Standing Committee on Taxation for the 124th state Legislature, which puts her in a position to help shape tax policy.

"I am pleased to be returning to Taxation," said Chase in a news release. "As we work to restore prosperity to our state, it is vital that we not impede our recovery with higher taxes. I look forward to working with my colleagues to ease the tax burden on all Mainers."

The Maine Legislature has 17 joint standing committees, each composed of 13 members — three senators and 10 members of the House. Every committee has jurisdiction over clearly defined parts of state government.

The Committee on Taxation has jurisdiction over the Bureau of Revenue Services, the Maine Residents Property Tax Program, and a broad range of related issues. The committee also has jurisdiction over tax exemptions and credits, property valuation and assessment, tax increment financing, municipal revenue sharing, and unorganized territories and tree growth tax issues.

Rep. Chase is a second-term legislator representing House District 147, which includes part of Wells.

Rep. Kathy Chase Announces Opening of Wells Warming Center at WOCAM

2008-12-31T07:37:00.001-05:00

Rep. Kathy Chase Announces Opening of Wells Warming Center at WOCAM

AUGUSTA – State Rep. Kathy Chase has announced that the Wells warming center will open January 3 as a refuge for local residents who find it difficult to pay their heating bills. The Wells-Ogunquit Center at Moody (WOCAM) will welcome all those who need to save on their home heating costs.

The center, located at 300 Post Road, in Wells, will open its doors an extra day to the public for nine Saturdays in January and February from 9 a.m. to 4 p.m. The program, which runs through February 28, is intended to enable people to turn down their thermostats for the day.

The center will serve a light lunch on those Saturdays. There is no charge, as the program has been funded in part by a grant from Bank of America. Local restaurants have agreed to donate lunches. More than 50 volunteers, including several members of the Ogunquit Rotary Club, have agreed to help out.

"It has been a team effort from concept, to funding, to implementation," said Rep. Chase, a Wells Republican who was reelected in November to her second term in the Legislature. "People have offered to work and local organizations have enthusiastically supported the project. It’s terrific to see the community coming together for each other."

The Wells-Ogunquit Center at Moody opened in 2004 as a gathering place for senior citizens from Wells and Ogunquit. The center has more than 700 members and offers numerous programs, trips and lunches. For more information, call 207-646-7775

Thank you, Wells voters

2008-12-02T10:55:00.000-05:00

Thank you, Wells voters

To the Editor (York County Coast Star):

Thank you for again electing me as your representative to our Maine State Legislature. It is an honor to serve you. Your support and encouragement during this election was deeply appreciated and I eagerly look forward to representing my home town a second time in Augusta.

I also want to extend my sincere gratitude to my team for assisting me in running a successful, positive campaign. My opponent, Fred Houle, who also shares a love for Wells, was a hard-working competitor and "hats off" to him and his team for a fair and balanced run for office.

A lower tax burden through reduced spending and a more efficient state government, creating a better business environment in Maine to increase jobs in Maine, Health Care insurance costs, energy alternatives and our immediate state budget shortfalls will be our very demanding agenda over the next two years.

My commitment to you is to work hard for a more responsible fiscal policy for our state — just as all of us have to do in our own personal lives.

Let me know what you think! info@kathleendchase.com

Rep. Kathy Chase
Wells District #147

(Op-Ed) Dirigo health meets the citizens' veto.

2008-07-09T10:42:00.001-04:00

Dirigo health meets the citizens' veto.

By Rep. Kathy Chase

June 19, 2008 6:00 AM

http://www.seacoastonline.com/apps/pbcs.dll/article?AID=/20080619/OPINION/806190364

The campaign to force a citizens' veto on the new Dirigo tax is up and running, spearheaded by a coalition called Fed Up With Taxes.

If enough valid signatures are collected by July 17, the issue will go on the November ballot. Maine residents will then get a chance to kill this new tax — more than $50 million a year — that was instituted to prop up the failed experiment known as Dirigo Health.

Many political observers believe that if the citizens' veto accumulates enough signatures, the people who voted for this new tax (all except two who voted for it were Democrats — and I voted against it) will demand that the governor call the Legislature back for a special session.

They'll want to kill the tax themselves and remove it as an election issue. With opposition to this tax spreading like wildfire across the state, Augusta's big tax-and-spenders are running scared. A special session will cost the taxpayers about $40,000 a day in allowances and special session pay for legislators.

Eliminating the new taxes would not necessarily eliminate Dirigo itself. The program is the "signature" accomplishment of Gov. John Baldacci, and his Democratic allies in the Legislature would never let it perish while he is in office. Besides, as President Reagan once remarked, "The closest thing to eternal life on this earth is a government program."

If the taxes are removed by the citizens' veto or the Legislature, the Dirigo high command probably would revert to the unpopular but serviceable Savings Offset Payment to keep the program alive. Of course, if Dirigo were as critical as its proponents claim, the Legislature could finance it through the General Fund rather than pile the tax burden even higher on the overtaxed people of our state.

The citizens' veto is not an effort to kill Dirigo Health but to repeal the new tax on beer, wine and soft drinks, along with the 1.8 percent tax on so-called "paid claims" — essentially a tax on doctor's bills. The total damage to Maine people comes to between $50 million and $70 million a year.

My guess is that if the Fed Up With Taxes coalition can gather the necessary signatures to get on the ballot — some 55,000 — the people will pass it handily, because they really are fed up with taxes. They are not likely to be comforted by the way this tax came into being, either. The majority party sprang it as a surprise April 15, in the final days of the Legislature. That night, under the cover of darkness, they jammed it through the House and Senate on party line votes.
Worst of all, the Democrats did all this with complete disregard for legislative protocol. There was no public hearing or public input of any kind. This was a brazen, arrogant maneuver, and the Democrats deserve to have it blow up in their face. This is not how we do business in Maine.

The whole sorry episode might have been less odious if the new taxes were targeted to road repair or paying down Maine's $200-million debt to hospitals. But they are going to Dirigo Health, a program once hailed as "bold" and "historic," but which has turned into a stunning disappointment.

When the Legislature passed Dirigo in 2003, it was advertised as a self-funding program to provide affordable coverage to Maine's 138,000 uninsured residents. Five years later — and one year before the deadline to cover all the uninsured — the program enrolls just over 13,000 people, only 5,000 of whom were previously uninsured. We have poured more than $100 million into it, and now we'll pour in another $50 million to $70 million a year. That's a lot of money invested for a rather meager payoff.

Sadly, this all could have been avoided. The day before the majority party passed the Dirigo tax, it shot down on a party line vote a bill that could have lowered insurance premium costs across the board — including for Dirigo. That bill was LD 1047, titled "An Act to Lower the Cost of Health Insurance."

House Democrats attacked it during floor debate as "extreme," but it wasn't even controversial. It would have created in Maine the same kind of health insurance system already employed by the vast majority of states. In many states, people pay only a third to a half of what Mainers pay for the same insurance policies, often from the same companies.

Here are a few parting facts about Maine's broken insurance system to illustrate why we needed major reform. Maine families pay the second highest premiums in the country and carry deductibles seven times higher than the national average. Young people are leaving Maine because unaffordable group-insurance rates cause job loss. With LD 1047, premiums could be cut in half for individual coverage, and the chronically ill could get affordable coverage in a "risk pool." More insurance companies would have entered the Maine market, bringing stronger competition, more insurance options and lower premiums.

Instead of rolling the dice on an experimental program like Dirigo, and now taxing Maine citizens to pay for it, we could have had a superb system based on proven results. Unfortunately for all of us, the majority party said no.

State Rep. Kathy Chase (R-Wells) serves on the Legislature's Taxation Committee.

Maine's madcap licensing policy comes to an end

2008-05-14T06:43:00.000-04:00

http://www.seacoastonline.com/apps/pbcs.dll/article?AID=/20080508/OPINION/805080363/-1/ARCHIVE

Maine's madcap licensing policy comes to an end.

By Rep. Kathy Chase, York County Coast Star, May 08, 2008

One of the landmark achievements of the last legislative session was the enactment of LD 2309 — "An Act to Enhance the Security of State Credentials."

At long last, after years of carelessness, we have tightened the requirements to get a Maine driver's license. You will now have to show proof of residency in Maine and proof of legal status in the United States to qualify for a license.

A driver's license is more than a plastic card that says you know how to drive. A license has become essentially a national ID card, good for everything from cashing checks and buying firearms to boarding airline flights. It bestows legitimacy.

A state-issued driver's license is so valuable, in fact, that it has been called "the key to the kingdom."

One of the untold stories about this bill is that it very nearly failed. On April 16, in the first roll call vote in the House, 72 Democrats voted to kill the bill outright. Those voting to defeat it included the Speaker of the House, Glenn Cummings, and the leader of the House Democrats, Hannah Pingree.

All Republicans voted to keep the bill alive, of course. They were joined by two Independents and 16 Democrats to muster the 73 votes needed to prevail. The final 73-72 vote was so shocking to Democrats that an audible gasp could be heard in the House chamber when the tally was announced.

Republicans remained united for license security as the vast majority of Democrats battled us every step of the way. They held one roll call vote after another, hoping to see the bill go down if one of the proponents was not in his or her seat at the time of the vote. It was that close.

This victory for common sense was a longtime coming. For years, Republicans have offered bills to strengthen Maine's lax and lenient licensing procedures. Maine was one of only four or five states that freely issued licenses to illegal aliens. We know that the 19 hijackers on Sept. 11 had more than 60 valid licenses between them, from a combination of states. Nine of these were actually registered to vote, thanks to the Motor Voter Act. Driver's licenses enabled them to board their flights on that fateful day.

In the wake of that horrendous terrorist attack, almost all states that were issuing licenses to illegal aliens stopped the practice. But not Maine, where the liberal majority party rules supreme. The Maine Civil Liberties Union actually favors giving Maine licenses to people who don't even live in this state. They say it's a matter of "human rights."

Our reckless policy was reinforced in 2004, when Gov. John Baldacci quietly signed an executive order making Maine the nation's only "sanctuary state" for illegal aliens, a place where they could obtain licenses and also receive welfare benefits.

Word spread quickly through the illegal alien grapevine that Maine was the place to go for a license. With reciprocity agreements between states, a foreigner with a Maine license can exchange it for a license from their "home" state. At the Maine Bureau of Motor Vehicles, staffers were not allowed to challenge people when they told obvious lies about where they lived.
Licenses were issued to foreigners claiming that their Maine residence was aboard the Scotia Prince cruise ship. Others said they lived at the State House or at seasonal campgrounds.

Nor did it matter that these same people lacked Social Security numbers. All they needed was a form from the Social Security Administration stating that they were not entitled to an SSN. From 1976 to 1997, a total of 46 licenses were issued to such people, usually foreign exchange students. But as the governor's "sanctuary state" policy kicked in, the number soared, reaching 1,112 in 2006 and 1,329 last year.

One illegal alien had 10 different Maine licenses from 10 different BMV offices, complete with fake names. What's more, many of the Social Security forms submitted to the BMV turned out to be forgeries.

Maine's approach to handing out licenses would still be rolling merrily along without two things happening.

First, the U.S. Attorney for the District of Maine, Paula Silsby, began prosecuting individuals for running vanloads of illegals into Maine to get licenses — a felony under federal law.
State officials could no longer pretend their policy was harmless.

Next, the U.S. Department of Homeland Security began to notice that Maine had become a kind of rogue state. In communications with Gov. Baldacci, DHS officials said Maine licenses had been so deeply compromised that the federal government would no longer recognize them.

That meant that Mainers could not board flights using Maine licenses as their ID starting in mid-May. Envisioning turmoil and outrage at Maine airports as tourist season began, the governor had no choice but to submit to DHS directives. The only way to avoid the penalty, DHS officials said, was to tighten Maine law substantially to make sure that licenses were given only to people in the country legally.

The governor's team scrambled and presented their bill to the Legislature during its waning hours. It passed the House and Senate on April 17 and was signed into law the same day.
Getting a Maine driver's license is not a right. It is an earned and qualified privilege. One can earn it by passing a driving test and qualify for it by residing in Maine — and the United States — legally.

That is the way it should be, and now, finally, that's the way it is. It should have happened long ago.

State Rep. Kathy Chase (R-Wells) serves on the Legislature's Taxation Committee.

Tax Reform - Maine Townsman, July 2007

2007-08-05T09:02:00.000-04:00

Tax Reform - Maine Townsman, July 2007
Written by Geoff Herman, Director of State & Federal Relations, MMA.

Reprinted with permission from the Maine Townsman.

Comprehensive tax reform is like Charlie Brown’s football. Lucy sets the ball in a perfect position for Charlie Brown’s field goal only to snatch it away at the last minute every time. This year was going to be different, though. This year a special process was going to be used to develop the tax reform plan…a process so deliberate, open, careful and genuine that if the Taxation Committee was actually able to develop a comprehensive tax reform proposal using that process, snatching the football away at the last minute would be cruel and unfair and inappropriate.

The process was used and the process worked, but inappropriate or not, Lucy snatched the football away yet again.

The Process. The hero of what has become a biennial Greek tragedy is the Taxation Committee.
Anyone who may need to write a Master’s or Doctoral thesis should consider transcribing the tax panel’s efforts over the last six months. The thesis would become an instruction manual for any governmental committee – federal, state, regional or local – charged with tackling a controversial project of wide ranging impact. The members of the Taxation Committee, spread across the entire political spectrum from one edge to the other, accomplished a great deal more than simply fulfilling their charge, although they did that in spades. They worked tirelessly on their task. They produced an extremely thoughtful, detailed, researched, coherent, balanced and comprehensive tax reform product. They transcended partisan ideologies in a manner rarely seen in the State House, particularly with respect to the issue of taxation. And they vigorously reached out to all interested parties throughout the five-month development stage. This was not a tax reform plan that flew into the Committee room from another corner of the State House all lubricated with some sort of partisan or political juju; it was a plan that was developed genuinely and authentically by the Committee itself on the basis of a set of principles developed and published by the Committee in January (see sidebar).

(Sidebar comments available in the Maine Townsman, July 2007)

In February, that set of principles was widely praised throughout the Capitol Building as the appropriate foundation for reform, even by those who would be loading the torpedoes in June.

The product. There is no special magic with respect to the fundamentals of reform. The income tax rate is too high, the sales tax base is too narrow, and property taxes are too burdensome, particularly for Maine residents with limited income in communities undergoing rapid valuation increases. When done carefully, moving the tax burden away from income and onto consumption (i.e., the sales tax) provides an indisputable benefit to Maine residents and resident businesses, who pay all the income taxes but do not pay all the sales taxes. Similarly, by carefully using tax revenue from “exportable” tax sources, such as the lodging tax and real estate transfer tax, real property tax relief can be delivered to Maine residents. Municipal officials have been seriously pushing for a modernization of the state’s tax code for well over a decade. The building blocks of reform are staring us all in the face.

If the building blocks are common knowledge, the special value the Taxation Committee added to this reform proposal was a relentless fine-tuning of the product to make sure that it would deliver the promised relief to Maine residents equitably across all income categories and to both residents and resident-businesses. That task was not easy. Because of its multiple moving parts, all of which impart different impacts on the taxpaying community, fine-tuning the tax reform engine was both tedious, time consuming, and tear-your-hair-out frustrating. Any tax reform proposal is difficult to nurture and easy to kill, and a weaker Committee would have bailed out on the task and had a thousand good excuses to do so.

But to its credit, the Committee persevered, and in early June LD 1925, An Act to Cut Taxes on Maine Residents by over $140,000,000, finally came into full balance and was printed with its companion constitutional amendments (LD 1819) in tow.

The Punch Out. There are a number of ways to kill legislation. When it is good legislation, it generally falls to the lobbyists to accomplish that task, along with some back-stage legislative assistance.

The legislators’ task is to hang the legislation up on a firing range for awhile so the lobbyists can take a good crack at it, and then ultimately smother the bill with kindness. After receiving a strong initial vote of endorsement in the House, LD 1925 was stalled in the Senate for a week, allowing plenty of time for the lobbyists to work it over.

The lobby-ist’s tool is sophistry, which is the art of refram-ing something so that it appears to be either something it is not or something it should not be. It is probably the case that every contract lobbyist in Augusta was hired in some capacity to kill tax reform. They used four basic sophistical arguments:

1) Blame reform for being exactly what it is. Although the tax reform package was expressly designed to be “revenue neutral”, and even though the principle of “revenue neutrality” was widely praised by both lawmakers and lobbyists in January and February, the lobbyists’ disdain in June was that the reform plan is “nothing more than a shift”. Believing the adage to be remarkably clever, they would say: “This reform does nothing more than rearrange the deck chairs on the Titanic.” In truth, the tax reform package included a proposed constitutional amendment that would have limited the ability of the Legislature to increase state tax rates, but approving the constitutional amendment was of necessity a separate legislative decision. The stated goal of the reform package itself was revenue neutrality, which it delivered.

2) Disparage reform for being imperfect. This old stand-by is a first-cousin to the strategy of blaming legislation for being exactly what it is. The idea is to frame a proposal by that which it fails to do, regardless of what it actually accomplishes. In this case, the tax reform plan was roundly faulted for two categories of imperfection. First, the expansion of the sales tax base could not possibly be perfectly executed and would therefore have to be subsequently modified to address any unintended consequences. Second, the reform plan failed to impose an enforceable spending limitation procedure on the Legislature short of a constitutional amendment, which turns out to be something of a Herculean task.

3) Illuminate reform with just the dark side of the moon. Like any municipal revaluation, which is local government’s political equivalent of tax reform, there are winners and losers associated with the effort. The beneficiaries quietly enjoy their winnings; we hear loudly from the losers. Only in Lake Woebegone, where all the children are above average, would tax reform make winners of us all. LD 1925 provided significant positive benefits to the vast majority of Maine’s residents and businesses in the form of reduced income tax rates, reduc-ed capital gains taxes, repealing the “alternative minimum tax”, conform-ing to “Sect-ion 179” of the federal tax code with respect to accelerated depreciation, direct property tax relief for primary residents, a fully open property tax deferral program for all elderly residents, and more. Those benefits were covered by a long overdue expansion of Maine’s sales tax base to recognize the nature of retail transaction in 2007 rather than 1953, when the sales tax was adopted. The proponents of tax reform fully acknowledged both sides of the tax reform equation in the belief that the benefits of the package outweighed in many dimensions the natural resistance to expanding the sales tax base. The opponents of reform excluded from all analysis the positive side of the tax reform package.

4) Act dazed and confused. Feigning an unfamiliarity with the proposal that has been openly developed over a 5-month period, posing questions in the last days of the session that might have constructively been asked in March or April or May, begging for time to more fully understand, implying that business expansions would be threatened, portraying the package as “way too complicated at this 11 th hour”…these are all lobbying postures designed to rationalize a legislative decision to delay action on tax reform until the following (election) year. When it comes to comprehensive tax reform, a delay into an election year is a decision widely recognized as the equivalent of “indefinite postponement”.

Because of the process the Taxation Committee adopted in January, none of these sophistical arguments pass the straight-face test, which is not to say they didn’t work to accomplish the defeat of tax reform. The legislative process itself ensures that the odds are always against a legislative enactment of any consequence. It is probably most often the case that the failure of the Legislature to enact important legislation can be attributed to various mistakes that are made in the development and advancement of the legislation through the process, mistake that can be identified with hindsight.

In other cases, however, the Leg-islature’s failure to enact the legislation speaks for itself, and this is one of those circumstances. The process could not have been executed more professionally, the product could not have been more thoughtfully created.

The job simply does not get done any better than this Taxation Committee did it. There’s no sugar-coating it. Acting as consciously as it may ever act, the Legislature said “no” to tax reform.

Chase reflects on tax reform failure - Learning experience in legislative process.

2007-07-22T15:44:00.000-04:00

Reprinted with permission by the York County Coast Star

July 05, 2007 6:00 AM. By Jim Kanak. jkanak@seacoastonline.com

Chase reflects on tax reform failure - Learning experience in legislative process.

WELLS — When State Rep. Kathy Chase (R-Wells) got elected to the Dist. 147 seat in November 2006, she said her first choice of committee assignments was the Joint Committee on Taxation. Despite being a first-term representative, Chase got her wish. It was the work of that committee, most notably the tax reform package that died in the final hours of the legislative session, that framed her experience over the nearly seven months of the term.

"It was highly interesting and dynamic," she said. "That committee is second only to Appropriations in terms of authority. We started outlining the tax reform bill in the first couple of weeks. We began by setting out ground rules and principles."

During the course of the session, Chase said the committee received a lot of bills from legislators, including her own, that dealt with tax reform. All of these had to be considered. "From the beginning, everything was on the table," Chase said. "We agreed we'd slowly work things out."

One of the criticisms leveled at this legislature was that it did not adequately address tax relief. Chase said her committee only had jurisdiction over tax reform, not spending cuts. "We looked at redistributing the load," she said. "The Taxation Committee has no jurisdiction over reducing spending. We tried to get that message out but couldn't."

The committee early on agreed that property tax and income tax were the two areas that citizens demanded be reformed. "To shift the load from income and property tax we had to shift it to the ones we were light on," Chase said. "Those were the sales tax and exportability, that is, shifting the load to [non-residents].

"We kept the overall sales tax at 5 percent, but expanded it [to non-taxed services]. None of us were comfortable with that but it was the only way to make things more balanced. One of the benefits of broadening it was it was fairer to have outsiders share in the burden. Then we took all the anticipated revenue to reduce the income and property tax."

Among the most controversial proposals were increases to the meals and lodging tax from 7 to 8 percent. "That's the same as in New Hampshire," said Chase. "Tourists who come here pay more for both in their own states."

Chase said the argument that the committee eliminated mortgage deductions was not entirely correct. "We got rid of deductions but included tax credits," she said. "That reduces the amount of taxes people pay. In the end, they'd end up paying less tax. The revenue from broadening and shifting the burden would directly benefit Maine residents. Tax credits could only apply to Mainers."

Other features of the committee's package, Chase said, included a doubling of the Homestead Exemption while allowing towns to not participate if they chose, expansion of the circuit breaker program for low income people, creation of a tax payment deferment program for elders, and allowing towns to keep 10 percent of "natural sales tax growth" beginning in 2009.

"There would have been a reduction of $140 million to Maine residents," Chase said. "90 percent [of residents] would have benefited."

To forge a full agreement of the package, Republican and Democratic committee members developed a compromise. "For the Republicans, tax reform was coupled with a constitutional [amendment] piece," said Chase. "It had three parts. First, any increase or decrease in sales, excise, or income taxes need a two-thirds majority vote in the legislature.

"Second, there was an opt out [for towns] for homestead exemptions. And third, we would allow a local options sales tax. Voters would have voted on each [amendment] individually."
Chase said the agreement was that Republicans would support the reform package if Democrats would support the constitutional changes, and vice versa.

So, why did the package ultimately fail? Basically, Chase said, things started to unravel when the full individual chambers got involved. There was disagreement on whether all three of the constitutional amendments would be approved. Ultimately, Chase said, the two bodies couldn't agree.

Ultimately, the Senate voted the tax reform piece down and the House killed the constitutional amendment proposal, ending things.

Reprinted with permission by the York County Coast Star

July 05, 2007 6:00 AM. By Jim Kanak. jkanak@seacoastonline.com

New Laws to Affect Maine Drivers:

2007-07-12T17:22:00.000-04:00

New laws were enacted that will affect drivers on Maine’s highways and roadways this fall. One will prohibit drivers who are younger than 18 years old from using a mobile phone or hand-held device while operating a motor vehicle. A $50 fine will be levied for a first offense and a $250 fine will be issued for subsequent offenses.

Another will make the failure to wear a seat belt a primary offense. This means that a law enforcement officer will be able to stop and cite a driver solely for failure to wear a seat belt. Currently, drivers can only be fined for a seat belt infraction if they are stopped for another offense. This new law will keep the current fine structure of $50 for a first offense, $125 for the second offense and $250 for subsequent offenses.

The Legislature also authorized a new specialty license plate. The “We Support our Troops” plate will feature those words and a yellow ribbon. Money raised from the specialty plate will benefit the families of troops serving overseas.

An unpopular law has been repealed that required insurers to notify the State when a motorist’s insurance policy had lapsed or was canceled, resulting in a suspension of the motorist’s registration. Often people who merely changed insurers had their registration suspended until they notified the State that they had a new policy.

Kathy ChaseDistrict #147

"Jessica's law" testimony I delivered in favor of LD 46 to the Criminal Justice and Public Safety Committee.

2007-06-05T20:53:00.000-04:00

I would like to share the testimony I delivered in favor of LD 46 to the Criminal Justice and Public Safety Committee.

LD 46 - An Act To Create Mandatory Minimum Sentences for Persons Convicted of Certain Sex Offenses against Victims under 12 Years of Age.

summary - This bill changes the sentence for gross sexual assault against a victim who is under 12 years of age to a period of imprisonment of 25 years, none of which may be suspended. If the defendant had previously been convicted and sentenced for committing gross sexual assault, rape or gross sexual misconduct against a person who is under 12 years of age, the court must impose a sentence of life imprisonment, none of which may be suspended.

Good morning Senator Diamond, Representative Gerzofsky, and members of the Criminal Justice and Public Safety Committee. My name Kathy Chase and I represent House District #147, which is most of Wells. I am a co-sponsor of LD 46 and I am testifying in favor of this bill.

Sexual assault against a victim who is under the age of twelve has become a frighteningly growing crime across the nation and unfortunately for us, Maine is no exception.

While taxes, jobs, business growth, education, healthcare—and other concerns
we may deal with as legislators occupy many hours of our work here in Augusta, I believe we can all agree that it is the safety of our young that is most important to all of us.

It is an issue that is especially dear to my heart as we have 6 grandchildren living here in Maine, all under the age of twelve.

There are those who prey on children. That fact is chilling, devastating and all too real. I want to know that if someone sexually abuses a child here in Maine, they are punished and punished harshly.

Currently, hundreds of these predators are living in this state. An article in the March 29th edition of the Waterville Morning Sentinel entitled “Sex Offenders: Still a BIG Problem in Maine” quoted Police Chief John Morris as stating: “Today as we sit, there are 72 registered sex offenders in this city. We are investigating another 10 right now, who are new registrants. Every one of the 82 are people who have sexually violated young children.”

In that one town—not that far from where we’re standing this morning—is just one group of predators that has scarred the lives of more kids than there are in my grandson’s entire second grade. They’ve been convicted, served some sentence—and they are back out in our society. Statistically they repeat their crimes.

In the same Waterville Morning Sentinel article discussed previously, Chief Morris goes on to say: “There’s absolutely no doubt in my mind that some registered child sex offenders will re-offend.” If just one of them does, it is one too many. If just one of them does, which one of your children, or grandchildren could be the victim.

Last year the legislature had the opportunity to pass this bill – or one very similar to it.

What eventually passed was slightly better than previous existing law. When it comes to the safety of our children, slightly better is not strong enough.

LD 46 says if you are convicted of a gross sexual assault against a child under the age of twelve years, you will serve a mandatory 25 year sentence. If you are convicted of a gross sexual assault against a child under the age of 12 and you have previously been convicted and sentenced for committing gross sexual assault, rape or gross sexual misconduct against a child who is under the age of twelve, you will be sentenced to life imprisonment.

Other states have already passed laws similar to LD 46, and even more are in the process of doing so. If we do not, my fear is that Maine will be viewed as an easy state for those who commit these crimes.

As legislators we are in the unique position here in our state to create and pass laws that can protect our children from these real monsters. No one other than us can do it. It is our responsibility—no one else’s.

We need to prevent crimes against our children by being known as a tough state for those who would harm our young. LD 46 must be passed and not weakened this time.

The rest of the country and the predators within this state need to know that if you sexually assault a child in Maine and you are convicted, you will go to prison for 25 years. Period.

Thank you for allowing me to testify.

Kathy Chase
House District #147

Regarding the article from the Sunday Maine Telegram – Portland Press Herald, June 3, 2007 - Tax-cut plan rides on tale of two parties.

2007-06-05T20:49:00.000-04:00

Regarding the article from the Sunday Maine Telegram – Portland Press Herald, June 3, 2007 - By Paul Carrier.

“Tax-cut plan rides on tale of two parties. The proposal comes in two parts, and the major parties divide over their backing for each.”

“A complex plan to cut Mainers' taxes by redesigning the state's tax system faces an uncertain fate in the Legislature. That's because the hotly debated package may not get the bipartisan support it needs.”

I read the article and it is accurate. It is a very tough choice we are faced with between the constitutional piece which includes 3 parts that the legislature will be voting on as one constitutional bill:....

1) That it will require a 2/3's vote of both houses to raise the sales, excise or income tax rates.

2) That the Legislature will allow municipalities to levy a local option sales tax

3) That the legislature will allow (by a vote of the town’s people) a municipality to "opt out" of the towns matching homestead funds. In other words (under the new tax reform package) the Homestead exemption is $26,000 with the state paying half & the municipality paying half. This proposed change would allow the towns NOT to pay their half of the Homestead, but the state will continue to pay the $13,000.

If passed as a group by the legislature, each of the three parts will be voted on separately by the people in referendum. It was purposely grouped to help it pass in the legislature.

.... and the Tax reform package which is contingent on passing with the result of the passing of the constitutional piece:
Tax Reform package (still in draft mode as of 6-2-07) would:

1) Provide a more stable tax base by shifting the current heavier tax burden on income tax and property tax to be more equitably shared by sales tax. (the goal of tax reform)

2) as a result of broadening (and therefore raising) the sales tax base, Maine's income sources are less impacted by economic swings

3) as a result of lowering the income tax to a flat 6% Maine will be a better place for small businesses (the backbone of Maine's economy) to invest and grow, thus stimulating our economy

4) provide more property tax relief by increasing Homestead, expanding the Tax and Rent Refund Program, and bring back the Elderly Tax Deferral program

5) allow municipalities to be returned 10% of the future growth of sales tax revenues

6) provide that 15% of the raised tax revenue be used for future and ongoing tax reform and tax relief

7) be revenue neutral- meaning the amount of taxes raised in tax reform would be used to reduce taxes in tax reform

8) not be a way to raise more taxes, but a way to make the taxes raised
fairer, more equitable and more beneficial to Maine residents.

The Republicans are reluctant to sign on to a Tax Reform package that is NOT restricted somehow (specifically with the 2/3's requirement to raise future tax rates) from being easily raised in the next session-- by the Democrats.

The Republicans feel that broadening the sales tax might provide a too
inviting base that the Democrats could not help themselves from raising up to a 6% sales tax rate, with huge rewards.

Or, after broadening the sales tax base to LOWER the income tax as our Tax Reform package does, that the Democrats will seize the opportunity to jack it back up, thus not only gaining the broadened sales tax but raising the income tax back up as well.

The Democrats are against giving up their simple majority rule since they have been the simple majority for the last 30+ years and see it as a foolish move to change what they perceive is a "good" thing for their party.

Their "official" statements are that the simple majority IS the Democratic way and the "super majority" sets up the scenario that a "minority" can stop what the "majority" may want. The Democrats also state that History of raising tax rates in the legislature does NOT demonstrate that the Democrats are prone to raising tax rates as the Republicans are always declaring.

SO..... therein lies the conflicts. If the Constitutional piece fails, do we then vote against the Tax Reform package? Or if the Tax Reform package is a good thing for Maine, do we believe it enough to vote FOR the Constitutional package?

If the Republicans vote against the Tax Reform because the Constitutional piece failed, will the Democrats (who clearly
have the simple majority) still vote for the Tax Reform package, without the shared responsibility of it being "bipartisan"?

According to all who have been there for many years, this is the closest (if not the best) we have come to providing a good, solid tax reform package. That is a good thing. But creating it and PASSING it are two VERY different issues.

The intelligence, hard work, commitment and bipartisanship that was so
evident in our committee's effort to put the Tax Reform Package together, is evolving into skittish politics.

Sincerely,
Rep Kathy Chase
Dist #147 Wells

Update on the Taxation Committee hearings.

2007-05-23T05:18:00.000-04:00

Update on the Taxation Committee hearings.

First I would like to address some of your concerns. We on the Taxation Committee have been working hard to ensure we provide Tax Reform and Restructuring recommendations that are fair and equitable for all Mainers.

Tax reform is a "work in progress" and I consider it a "living entity” that needs to be revisited and readdressed each year.

Here are some points we have on the table as part of the Tax Reform package. None of the following points are set in stone yet.

1. Currently the greatest tax burden for Maine residents is on property and income tax, and NOT on the one tax that is shared by outsiders and those who live here 6 months less 1-day, which is the sales tax.

2. The Goal of the Tax Reform/Restructuring is to shift the burden to be more equitably and favorably for Maine residents, based more on sales tax and LESS on both property tax and income tax; which all Maine residents have no choice but to pay.

3. The tax package will be revenue neutral — meaning taxes raised will be taxes reduced.

4. Whatever tax revenues are increased will go DIRECTLY into tax reduction for either income or property taxes for Maine residents.

5. We are reducing the 8.5% bracketed income tax down to a 6% flat rate. None of the tax restructuring will happen without that in place.

A. With the flat rate you will be allowed to deduct 12% of your Federal itemized deductions

6. We intend to increase the state money for the Homestead Exemption and allow the towns to “opt out” of paying the matching amount.

7. We are planning to allow municipalities to be returned 10% of the future growth, from a base year, in sales/lodging/meals tax to help offset property taxes.

8. We will be including a Tax deferral program for the elderly (65+) who cannot pay their property taxes.

A. YES as the above portion costs money, we are looking to expand the sales tax base, increase lodging/meals and real estate transfer taxes—none of which is nailed down yet. All of these taxes are paid by more than Maine residents and the revenues will buy down the taxes that ARE paid by Maine residents—primary residents property tax and income tax.

B. We are also looking to designate a portion of any future increase (15%) (10% is already planned to be kept by municipalities) to return for more tax reform.

The benefit of doing this will result in approx 89% of Maine residents seeing a reduction in their overall tax burden the first year it is implemented.

Doing nothing will result in few—if any-- seeing a benefit.

The budget is also being worked on and I will NOT support a budget that increases beyond the growth in revenues. We simply must learn as a State, to live within our means.

Respectfully,
Kathy Chase
House District #147

123RD MAINE LEGISLATURE - JOINT STANDING COMMITTEE ON TAXATION

2007-04-16T13:30:00.000-04:00

We have been extremely focused working on the issues in the Taxation
Committee. For the past several weeks we have concentrated on tax reform.

We have held several hearings to solicit tax reform ideas from fellow legislators and members of the public. The public hearing is unusual in that it was not focused on any single bill, but rather was an invitation to present ideas for the Taxation Committee to consider as it moves toward a consensus fair tax plan.

The Taxation Committee has come to a bipartisan agreement on a list of 8
Guiding Principles for achieving tax reform.

123RD MAINE LEGISLATURE - JOINT STANDING COMMITTEE ON TAXATION

TAX REFORM PRINCIPLES

1. Tax reform should reduce the overall tax burden on Maine residents.

2. Tax reform should be revenue neutral.

3. The benefits of tax reform should be shared by all Maine residents in all regions of the State.

4. Tax reform should seek to simplify the tax structure.

5. Tax reform should be pursued using a clear, transparent and a participatory process.

6. Tax reform should provide an overall tax structure that is equal to or strives to be more progressive than the current system

7. Tax reform should strengthen the economic future of the State.

8. Tax reform should be bold and timely.

LD 1153 Presented to the Utilities and Energy Committee

2007-04-11T16:16:00.000-04:00

I presented my first bill (LD 1153) a few weeks ago to the Utilities and Energy Committee.

Current law requires that rates charged by water, sewer and sanitary districts are uniform within the territory of the district whenever the cost of service is uniform. This bill provides an exception to the uniform rate requirement for affordable housing.

Specifically, the bill grants water, sewer and sanitary districts the authority to reduce or waive the rates charged to affordable housing properties within the districts. The bill also requires that the reduction in the rates be credited directly to the associated customer account (and not the developer) to reduce the cost of the affordable home.

Welcome to Kathleen Chase's New Blog

2007-03-27T16:21:00.001-04:00

I will be updating my new blog very soon!