Gov. Janet Mills says she’s keeping an open mind about additional ways to help Mainers cope with inflation, especially record high gasoline and oil prices, and wouldn’t rule out larger taxpayer refund checks or a Republican proposal to suspend the gas tax for the rest of the year.
Mills spokesperson Lindsay Crete said the governor is worried that Russia’s invasion of Ukraine will continue to increase the price of gas and oil, possibly slowing Maine’s economic recovery from the pandemic. She said Mills also will consider four legislative proposals highlighted by Democrats last week in Augusta that would boost assistance for electric and heating costs.
“The governor remains very concerned about inflation, particularly its impact on working and low-income Maine people and small businesses who are bearing the brunt of its impacts, and she is committed to providing them with relief,” Crete said in a written statement. “The governor applauds lawmakers on both sides of the aisle for their desire to help Maine people with rising costs.”
But Mills and her staff also have stood behind her proposal to return half of the projected state surplus to more than 800,000 taxpayers in the form of $750 checks as the administration’s primary way to help offset the impact of inflation. She first unveiled the proposal Feb. 10 and revised it on March 1, raising the amount of the checks from $500 to $750.
With the cost of gasoline and oil reaching record highs, energy policy and inflation took center stage last week week in Augusta and in the race for the Blaine House, and will likely stay there. Fuel prices are expected to continue rising because of U.S. sanctions against Russia and inflation, which reached another 40-year high in February and is showing no signs of slowing down.
Republicans in Maine have joined with national Democrats to advocate for a gasoline tax holiday to help lower prices, while opponents have warned that suspending the tax would provide little relief and result in less money to fix roads and bridges. Even if the gas tax is suspended, there’s no guarantee the savings would be passed along to consumers, critics warn.
Democratic governors in Colorado, Michigan, Minnesota, New Mexico, Pennsylvania and Wisconsin called on the U.S. Congress to suspend the federal gas tax of about 18 cents a gallon for the remainder of 2022. And Democratic governors in New York and California, as well as Republican governors in Virginia, Massachusetts and Georgia, are considering state-level relief measures.
Last week, Rep. Laurel Libby, R-Auburn, proposed suspending Maine’s 30 cents-per-gallon gas tax for the rest of 2022. The bill has not yet been taken up by the Legislative Council, which would have to greenlight the emergency after-deadline bill before it could be considered by lawmakers.
Libby’s proposal would result in a loss of about $173 million to the state Highway Fund, which receives about $230 million annually, according to Maine Department of Transportation, while saving the average driver $135 over the next nine months, assuming retailers pass the savings on to customers.
“Maine people are struggling to pay for their basic necessities in the face of crippling inflation, and in a rural state like ours, gasoline is absolutely a necessity,” Libby said in a written statement. “We need to provide relief for Maine families now, rather than waiting for the federal government to do so. Suspending Maine’s gas tax will provide immediate relief for families and businesses alike, and is the right thing to do.”
Former Republican Gov. Paul LePage, who is seeking an unprecedented third nonconsecutive term as governor, last week proposed a 50 percent reduction in the gas tax for at least 90 days. That proposal would result in an estimated $27 million hit to the state Highway Fund and save the average driver $22 this year, according to MaineDOT.
Crete said that Mills is open to considering Rep. Libby’s proposal, although Mills sounded skeptical when asked about the proposal by a reporter while touring Sebago Brewing Co. in Gorham.
Mills said her administration has discussed suspending the gas tax, but instead chose to offer $750 rebate checks to more than 800,000 taxpayers, so they can use it for gas, heating oil, food or electricity, the combined costs of which have risen at the highest rate in 40 years. The relief checks would represent half of a $1.2 billion state budget surplus projected through mid-2023.
“We’ve discussed that (gas tax holiday) off and on in our administration,” Mills said. “We chose to propose (sending) the cash back to people’s pockets because not everyone has the same needs. And we want to make sure people have the option to use that money as they see fit.”
Crete said the governor is “very open to considering increasing these payments to help Maine people cope with higher costs.”
The administration has also provided one-time electricity credits of $90 for about 90,000 low-income households, Crete said. And it provided one-time heating assistance of $800 for families with children who are currently enrolled in Temporary Assistance for Needy Families and Supplemental Nutrition Assistance Program and have identified heating costs as part of their household expenses.
LePage and the Maine Republican Party, meanwhile, have called the taxpayer rebate checks a campaign gimmick, even though it was originally proposed by Republicans.
“She’s trying to buy the election,” LePage said during an interview Thursday with WGAN News Radio. “What she wants to do is wait until October and send everybody a check with a nice letter. … It’s just buying the election and that’s just sad. The Maine people see through it.”
LePage also stressed that the projected surplus of $1.2 billion is not a sure thing. But, at the same time, he has called on Mills to reduce income taxes in response to that projection and has long advocated for the elimination of income taxes, something members of his own party opposed when he was governor. Income taxes make up about 40 percent of the state’s revenue.
LePage also suggested Mills was culpable, though not directly responsible, for the increase in gas and oil prices, because she supports President Biden’s renewable energy policies.
However, Crete said that Mills also supports increasing domestic oil production to help bring down costs.
“The Governor believes the Biden Administration should work with producers to boost domestic oil production, work with partners across the globe to stabilize oil markets to the greatest extent possible, and continue to incentivize a transition away from fossil fuels that will leave the country less vulnerable to Putin’s gas price increase,” she said.
Republicans have been trying to blame Mills for the broader increase in consumer prices, which is being felt not only by low-income families, but middle class families, too.
“It’s simple: Maine Democrats have worked to raise costs, including gas and electricity costs, and Maine Republicans are working to lower them,” Senate Republican leader Jeff Timberlake said in a written statement. “We know folks are struggling to keep up right now, and we’re focused on getting them the help they need.”
Democrats are amplifying efforts to help address those costs to prevent the arguments of those who blame them from sticking.
On Wednesday, Democratic lawmakers called a press conference to highlight four bills that would increase assistance for electricity and home heating costs.
Senate President Troy Jackson, D-Allagash, is working on a proposal to provide additional relief to certain electricity ratepayers in the form of tax rebates of $1,500 for residential and $2,500 for businesses with high energy use.
Sen. Chip Curry, D-Belfast, has proposed a plan to help the Maine State Housing Authority and local officials speed up the processing of heating assistance applications.
Rep. Raegan LaRochelle, D-Augusta, has proposed a related plan to establish a fund to hire temporary workers and purchase technology to reduce wait times for the low-income Home Energy Assistance Program.
And Senate Majority Leader Eloise Vitelli, D-Arrowsic, is looking to create a rate relief program for low-income Mainers and to set up a stakeholder group to explore long-term solutions to rate shock.
“I’m eager to listen to any and all proposals,” Mills said in Gorham. “We will look at the language of any bills that come down the pike.”
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