AUGUSTA — Maine lawmakers gave Gov. Angus S. King a standing ovation Tuesday night when he urged them to double the state tax on cigarettes and use part of the money to try to get young people not to smoke.
“The worst news of the year is that we are first — first! — in the nation in the proportion of our young people who smoke,” King said during a 55-minute State of the State address.
King proposed doubling Maine’s 37-cent tax on cigarettes to 74 cents. That would raise the typical price of a pack of cigarettes from $2.10 to $2.47.
King said some of the proceeds would be used on “a serious campaign to help keep people, especially kids, from starting [to smoke] in the first place.”
Aides said doubling the cigarette tax would raise an estimated $60 million over two years.
King would dump most of that money into an income-tax cut.
He would increase Maine’s personal income-tax exemption to match the federal exemption. This would have the effect of lowering state income taxes by $25 million a year, he said.
The governor also would use the increased tobacco money to drop 150,000 taxpayers altogether from the tax rolls. They are young people, part-time workers and the working poor, King said. Dropping this many from their state tax obligation would cost about $2.5 million a year.
King also promised to lower taxes as a percentage of Maine income, to create a nationally prominent marine research facility in Maine, and to start a new prison program called “restorative justice.”
But King saved all his emotional ammunition for his last proposal — the fight against cigarette smoking.
He said he had promised to do something about smoking when he was 30 years old and a hospital patient for malignant melanoma. A man named Henry Jones, who was dying of smoking-induced cancer, made King promise he would try to stamp out smoking.
“One figure about Maine’s addiction has haunted me,” King said. “Every year, 2,300 of our people die prematurely, unnecessarily, because of smoking. That’s a small town a year wiped out — Bingham, Limerick, Mars Hill, Monmouth. It’s a slow-motion killing machine and we just can’t stand by and let it happen.”
While there’s strong support for doubling cigarette taxes, there’s likely to be equally strong debate about how to use the extra money. Democrats have already said they want higher cigarette tax revenue to go toward creating a new health insurance program for poor children.
“I think it is appropriate to use a taxing mechanism to try to get people to change their behavior,” said Sen. John Cleveland, D-Auburn, a member of the Appropriations Committee.
“I think we should have a full debate on it, but I am in favor of increasing that tax,” said Sen. Mary Cathcart, D-Orono.
House Minority Leader James Donnelly, R-Presque Isle, said a more effective deterrent to smoking than raising taxes would be to enforce vigorously the current ban on selling cigarettes to minors.
“I don’t know that 37 cents is going to take too many kids off cigarettes,” said Donnelly.
House Speaker Elizabeth H. Mitchell, D-Vassalboro, said there are several bills this session to raise the cigarette tax but to use the money for different purposes such as health insurance.
“We’re worried about our young people,” said Mitchell.
The nation’s only independent governor also proposed a new corrections program called “restorative justice,” in which communities and victims have a direct role in determining how low-risk offenders on probation will serve their time.
And King proposed that by the year 2002, Maine should have the leading cold-water marine research facility in the world using the new school of marine science at the University of Maine as a hub and the Gulf of Maine as a laboratory. He didn’t mention putting up any additional money for the center.
King also said he’ll submit a bill that would create a firm target for all taxes, state and local. State and municipal leaders every two years would establish an overall target for taxes as a percentage of personal income.
“I am absolutely convinced that high taxes are now the biggest drag on the expansion of the Maine economy,” said King, arguing that New Hampshire’s low taxes helped its economy prosper.
King said Maine is 10th in the nation in state and local taxes as a percentage of personal income, but ranked 36th in per capita income.
King said he was setting a realistic goal of lowering Maine’s overall tax burden by 20 percent from 12.5 percent of income to less than 11 percent by 2001.
King said only Minnesota has similar legislation.
But Donnelly said Minnesota’s law is virtually meaningless.
“All Minnesota has is a nonbinding, voluntary resolution, and it hasn’t cut a dollar in taxes,” said Donnelly. “It’s a good general idea, but there is no plan.”
Donnelly and other Republicans resent the fact that King has pledged to do away with an income tax cap that was passed two years ago by a Republican Legislature. They’re not impressed by King’s plan to pour $27.5 million a year of cigarette money into income-tax relief.
Donnelly and others also complain that the Legislature or any other body cannot usurp municipal authority in setting local budgets.
“The state can’t dictate to municipalities how much they’re going to spend,” said Donnelly.
“If his bill tries to overrule local home rule, then it’s going to be a very difficult sell,” said Mitchell.
Rep. George Kerr, D-Old Orchard Beach, was skeptical of King’s promises to lower taxes, because Kerr thinks King’s $3.8 billion budget raises spending by an unacceptable amount. Kerr said various parts of the King budget also shift costs from the state to the local property-tax payer.
Christopher Lockwood, executive director of the Maine Municipal Association, was delighted that King promised to restore full funding of tree growth tax reimbursement in his two-year budget.
“That’s welcome news, especially for the smaller communities,” said Lockwood. “It’s been underfunded for many years.”
As for King’s pledge to look at overall state and local tax burden, Lockwood said, “We applaud the governor for his commitment to look at Maine’s tax structure comprehensively, also his recognition that something needs to be done about the property tax. We join in that commitment to reduce the overall tax burden.”
Bill Linnell, spokesman for the group Cheaper, Safer Power, said it was strange there was no mention by King of the Maine Yankee nuclear power plant, which has been shut down to fix various problems in the last year.
King’s call for lower taxes came amid some good state economic news. In figures released Monday, state revenue for December, reflecting sales in November, came in 13 percent greater than estimates.
All of the major tax lines were up over estimates and sales tax was 12 percent higher than the same month a year ago.
King was interrupted 21 times by applause and several times by laughter during the speech that was broadcast by Maine Public Television and Maine Public Radio.
King’s press secretary, Dennis Bailey, said King was still working on his speech at 5 p.m., two hours before it was to be delivered. “He was just tweaking it,” said Bailey.
Comments
comments for this post are closed