AUGUSTA — In an early sign that a divided Legislature will have trouble agreeing on what in the past were routine matters, the Taxation Committee voted along party lines Tuesday for a bill that in previous years has caused little disagreement.
The 7-6 vote in favor of LD 138 constitutes little more than a recommendation from one legislative committee to another, but it represents one of the first party-line votes taken in the Legislature this year amid calls for bipartisanship from both major parties.
“That vote came out about as I expected it,” Sen. Earle McCormick, R-West Gardiner, said. “If we’re going to have a fight over every $10 million bill, we’re going to have about 600 fights this year. There are bigger fish coming.”
LD 138 is on a fast track toward passage in the Legislature because it affects what exemptions individuals and businesses can claim on their 2014 tax filings, which are due by April 15. The bill was made urgent by the U.S. Congress, which waited until late December to pass a continuing budget resolution that included the extension of a range of tax breaks for 2014.
The debate Tuesday centered on a bonus equipment depreciation exemption that would allow businesses to reap tax benefits years in advance. It is administered under the Maine Capital Investment Credit and, if extended for the 2014 tax year, would cost Maine about $10.3 million in the current year.
Republicans favor the bill as presented by Gov. Paul LePage, arguing it is a matter of improving the business climate. Democrats argue it is a retroactive giveaway to businesses they didn’t expect and that the $10 million cost could be better used for other purposes.
“I can think of three or four (ways to use the $10 million) that my district and my municipality would be happy about,” said Rep. Adam Goode, D-Bangor, who co-chairs the committee.
Normally, bills go straight to the House and Senate following committee votes, but this one first must make a stop at the Appropriations Committee, likely Wednesday, for a vote.
The situation highlights a conundrum the Taxation Committee is likely to experience for months to come: Most of the major changes proposed for the state’s tax code this year are contained in LePage’s biennial budget proposal and therefore are under the jurisdiction of the Appropriations Committee.
Rep. Stephen Stanley, D-Medway, said the Legislature should have a long-term plan for the use of taxpayer funds, as opposed to making decisions on an item-by-item basis.
“The chairs of this committee ought to sit down with [the chairs of the Appropriations Committee] and discuss what we can to do create some good jobs in this state,” he said. “That is going to be the key to our survival. To take $10 million and just do what we’ve been doing for years is not a good step. We’re not creating jobs.”
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