- Associated Press - Tuesday, May 5, 2015

AUGUSTA, Maine (AP) - Republican Gov. Paul LePage’s administration said Tuesday that eliminating Maine’s income tax would spur economic growth, but critics warned that putting a $1.7 billion hole in the state budget would inevitably result in huge cuts to things like education.

LePage is seeking to amend the constitution to prevent the state from collecting the income tax beginning in 2020. Such a move would require two-thirds support in each chamber, which is unlikely because it faces fierce opposition from many Democrats, who are in the majority in the House. It would also need to be approved by voters.

The Legislature’s Office of Fiscal and Program Review has estimated that it would mean a roughly $1.7 billion annual decrease in general fund revenue. That’s roughly half the entire annual general fund budget.

“We could eliminate state funding for K-12 education and higher education, and we would still have hundreds of millions of dollars to make up in order to accomplish that goal,” Joel Johnson, an economist with the liberal-leaning Maine Center for Economic Policy, told the Taxation Committee. “Where we would come up with that, I’m not sure.”

Aaron Chadbourne, senior policy adviser to the governor, accused opponents of using “scare tactics” and told the committee that LePage believes that abolishing the tax and putting more money in Mainers’ pockets is one of the most powerful ways to grow the state’s economy.

House Republican Leader Ken Fredette, who introduced the bill on behalf of LePage, said the seven other states that don’t have an income tax haven’t had “the sky fall on them.” The bill is really about giving voters a chance to say whether they think eliminating the tax should be a priority for Maine, he said.

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