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Monday December 22, 2014
Posted: Sep 02, 2014

Cutler touts his tax reform plan in new ad

Open Season

Independent candidate for governor Eliot Cutler touted his property tax reform plan in a 30-second television ad that will begin airing this week.

It’s the second ad featuring Cutler to hit the airwaves in the last couple weeks.

In addition, the campaign on Tuesday released a 60-second radio spot that highlights last month’s endorsement of Cutler by U.S. Sen. Angus King.

“These ads highlight an endorsement I am very proud to have and an issue that I think is very important to Maine people,” Cutler said in a statement. “I’m not hiding behind negative ads paid for by political parties and special interest groups – I’m speaking directly to Maine people in my ads and talking about what I plan to do as governor.”

The centerpiece of Cutler’s tax plan, released in April, is a major expansion of the state’s homestead exemption from $10,000 to $50,000.

Paired with the expanded homestead exemption, Cutler wants to increase revenue sharing to municipalities from $85 million in 2015 to $185 million by changing the program to a revenue rebate that he says would better target benefits to Maine towns. Communities with lower property values per capita would get more revenue sharing.

While that change would likely result in modest increases in property taxes in communities, Cutler said it would be more than offset by the increased homestead exemption.

In the ad, Cutler calls property taxes, “one of the worst tax burdens in Maine.”

To pay for these changes, Cutler said he would increase sales taxes and has offered two options that he estimates would each generate about $180 million in annual revenue to offset the property tax reduction.

The first option would increase Maine’s sales tax from 5 percent to 7 percent from May 1 to Oct. 30, the block of time when more tourists visit Maine. That option also would make permanent the 8 percent tax on meals and lodging that was passed temporarily earlier this year to help pass the state budget and would eliminate sales tax exemptions on amusement and recreational activities such as golf, skiing and movie theater tickets.

The second option would be to simply increase Maine’s sales tax from 5 percent to 6 percent.

Any tax reform plan would face a significant fight in the Legislature. Many efforts have tried and failed over the last several years.

Cutler has acknowledged that his plan would meet resistance but said he’s the only candidate who has offered a property tax reform plan and a way to pay for it.

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