Sen. Dana Dow
I am delighted to once again have the opportunity to serve the people of Lincoln County, as well as the towns of Washington and Windsor in Knox and Kennebec counties, in the Maine Senate, and would like to sincerely thank the voters who have entrusted me to represent them in Augusta.
The Maine Legislature is now back in session, and we have a lot of work in front of us, not the least of which is coming to an agreement on a two-year budget that will fund state government through fiscal year 2018. In addition to that, there are more than 1,800 pieces of legislation my fellow lawmakers and I will have to consider before we adjourn in June.
I am the chair of the Legislature’s Taxation Committee, and I believe that is where some of our most important work will be done in the months ahead.
In November, the voters of Maine approved two well-intentioned referendum questions that will have profound negative effects on our economy. I know that, because many businesses are already feeling them.
Question 2 raises money for public education by imposing a 3 percent tax on Maine households earning more than $200,000. As a former schoolteacher, I agree that funding public education needs to be among our highest priorities. But this is the wrong way to do it.
While some believe we are “taxing the rich” and making them pay their “fair share,” what we are actually doing is providing a huge disincentive to small businesses to invest in Maine. Maine will now have the highest tax bracket in the entire country as a result of this referendum.
Many of the so-called “rich” who are targeted by this tax are small family-run businesses and professionals. They are contractors, real-estate agents, restaurant owners, and others who create jobs and operate on small profit margins. Many are S corporations that pay taxes on all profits but use our retained earnings to grow and stabilize our businesses.
At the business I own, this may result in two painful decisions: the inability to give raises to my employees this year and a postponement of much-needed maintenance projects on our facility. Retained earnings are what drive all major decisions, but because of this excessive new tax, they will no longer be at our disposal.
Question 4 is another well-intentioned but flawed proposal that was also approved by voters. It raises Maine’s minimum wage, which, in and of itself, isn’t bad. I have supported raising our minimum wage periodically, but this law is too much, too soon. It raises it to $9 per hour now (from $7.50) and $12 per hour by 2020. After that, the minimum wage will be indexed for inflation.
Once again, we are providing another obstacle for our businesses to be successful. Their higher operating costs will force them to raise prices and hire fewer workers. In some cases, they will be compelled to close. That is because we will soon have one of highest minimum wages in the nation, putting us at a distinct disadvantage for growing much-needed business and attracting new business. This tax causes more young people to leave this state as their jobs move and they are forced to move along with them.
In the last six years, Maine has made tremendous progress in lowering the tax burden, but now we have taken a giant step backward. The ripple effects from these two flawed laws will be felt throughout the state and threaten to slow our economic growth.
It is up to us in the Legislature to take whatever steps are necessary to undo the damage of these well-intentioned but poorly conceived proposals before it’s too late.
I can be reached at 287-1500 or dana.dow@legislature.maine.gov.
(Sen. Dana Dow, R-Waldoboro, represents Maine Senate District 13, which consists of all of Lincoln County except Dresden, plus Washington and Windsor. He chairs the Legislature’s Taxation Committee and also sits on the Insurance and Financial Affairs Committee.)
