Local options sales taxes should remain lost

“Get lost.” It’s not a terribly friendly sentiment. That said, the idea has fractured the partisan divide in Augusta, which means Maine voters can pressure their officials without running afoul of silly political games.

In this case, “lost” is an acronym for “Local Option Sales Taxes.” L.O.S.T.

Last week, Portland’s Democratic Mayor Ethan Strimling joined with several other municipal officials, including Auburn GOP Mayor Jason Levesque, to lobby the Legislature to let them impose new taxes. They asked to get “lost.”

Unsurprisingly, they were met with opposition from the Maine State Chamber of Commerce and other business groups. More shocking, the conservative Maine Heritage Policy Center and its left-wing analogue the Maine Center for Economic Policy asked the Legislature to retain current law. They didn’t want Maine cities to get “lost.”

Portland Mayor Ethan Strimling is pushing for a local option sales tax. Troy R. Bennett | BDN

This is an area where policy gets fun. Silly, childish comments about “Re-Thug-licans” and “Democ-Rats” fall by the wayside and real, robust debate about the role of government and public finances take their place. All from a very simple question: should Maine get “lost?”

Probably not.

The argument for it is simple. Towns want more money. Without local sales taxes, they will need to continue to leverage the property tax base in order make ends meet. The argument goes double when they feel they are being shortchanged by Augusta, whether through the revenue sharing process or education funding.

If they are allowed to get “lost,” then happy days of responsible municipal budgets are on the horizon. Unfortunately, “tomorrow” never seems to come.

Mayor Strimling’s Portland recently undertook an effort to see whether there was waste existing — or efficiencies to be gained — in the school system. Turns out, there was. While a significant cultural change, it became clear that the city’s two high schools were both operating at a fraction of their capacity. Merging them, along with a few other structural changes, could have saved the school budget and Portland taxpayers almost $3 million annually.

But then Gov. Janet Mills proposed increasing the state education budget, so the idea was scrapped.

The spending side of the government equation is where the most challenging decisions lie. Should towns consolidate services to gain efficiencies? What is the role of county government in Maine? How many schools does each town need?

Getting “lost” reduces the urgency pushing officials to face those hard questions, and the biggest problem we face today is not a lack of revenue. We’ve looked at it before, but Augusta’s spending has outpaced both inflation and our population growth over the past few decades. Our per student education spending statewide has done the same. The exception to this rule is our infrastructure, where we have been seriously shortchanged.

So getting “lost” would simply increase Mainers’ already significant tax load.

Last year at this time, a national survey came out ranking each state by tax burden. Maine came in with the third highest overall behind New York and Hawaii. We were near the top in property tax, 15th highest for income taxes, and top half for sales and excise tax.

If the Legislature wanted to reconsider the entirety of Maine’s revenue regime, together with the state-to-town funding mechanisms, then maybe getting “lost” is appropriate. But until that day, local option sales taxes should remain metaphorically lost.

Michael Cianchette

About Michael Cianchette

Michael Cianchette was the chief counsel to Gov. Paul LePage from 2012-2013 and deputy counsel from 2011-2012. A Navy reservist, he was deployed to Afghanistan from 2013-2014 as a trainer and adviser to the Afghan National Police. He is an alumnus of the Leadership Maine program and holds a BA in economics and political science from Boston College along with a JD and an MBA from Suffolk University. He works as in-house counsel and financial manager for a number of affiliated companies in southern Maine.