LaBonte works to sell governor's budget

AUBURN — Jonathan LaBonte, a staffer for Gov. Paul LePage and mayor of Auburn, gave the first of two scheduled talks on the governor’s proposed two-year budget Monday.

He’s insisting the $6.8 billion plan will lower Maine’s tax burden despite the “dark shadow” caused by referendum questions that raised the minimum wage and added a surtax to fund education.

LaBonte, director of the Office of Policy and Management for the LePage administration, said the passing of referendum questions 2 and 4 in November 2016 made the governor’s job to craft the budget even more difficult.

The governor is calling his final two-year budget a “do no harm” spending plan.

“He did the best he could with the tools he was given to ensure that we could do no harm to Maine’s budget based on those referendums that passed,” LaBonte told the audience Monday.

Question 2 helps fund education by adding a 3 percent surtax to Maine households making more than $200,000 a year, while Question 4 raises the statewide minimum wage.

A small crowd of about 20 people came to the Hilton Garden Inn in Auburn to hear LaBonte. Most were members of the Maine Heritage Policy Center, which is hosting both events this week.

LaBonte said the education surtax makes Maine second in the country in top marginal income tax rate. LePage’s budget seeks to delay implementation of the surtax until 2018, while proposing the surtax be picked up by all Mainers, not just those in the highest tax bracket, despite Mainers voting in favor of the measure.

He said his office recently completed an analysis of the impact from Question 2, which he said would result in job losses, a decrease of $600 million in Mainers’ disposable incomes and a state GDP hit of $160 million — all in the first year of implementation.

“What we’re seeing from our analysis is that there is real, significant harm,” LaBonte said, adding that his office will soon release its official findings to the public.

Approval of Question 4 raised the minimum wage from $7.50 an hour to $9 an hour this year. It will increase $1 an hour per year until it reaches $12 in 2020.

As for raising the minimum wage, LaBonte said his office predicts major costs, especially to the restaurant industry. He said LePage is urging lawmakers to make changes to the bill to “protect those businesses and jobs.”

LaBonte is scheduled to speak at another Maine Heritage Policy Center luncheon in Portland on Tuesday, as the LePage administration continues its discussions on the budget.

The governor’s next town hall meeting to discuss the budget is scheduled for Wednesday, March 8, in Yarmouth.

Matthew Gagnon, the CEO of the Maine Heritage Policy Center, which advocates for fiscally conservative policies, called Monday’s discussion one of the most important — and topical — of the year for the group.

“It’s an important document, and how we handle it is also very important,” he said.

Gagnon said the organization recently crafted a legislative guide book to help “define the conservative agenda” in the coming legislative session.

“Whether they accept it as is, or make radical modifications to it, which is likely, it still sets the agenda,” Gagnon said of the proposed budget.

Democratic lawmakers have criticized the governor’s budget proposal since it was unveiled in January, saying many of its elements have already been rejected by the Legislature in previous years.

In January, Assistant House Majority Leader Jared Golden, D-Lewiston, said House Democrats are committed to upholding “the will of the voters and improving public education funding in Maine,” referring to Question 2.

Both Gagnon and LaBonte pointed to news reports this week on the state maintaining $1 billion in its “cash pool,” contributing the numbers to LePage’s fiscal policies since being elected.

“The state’s not struggling to pay its bills the way it has during previous administrations,” Gagnon said.

Rick Holden of Portland, a longtime member of the center, said his chief concern is rising taxes. LePage’s budget looks to shift the state to a flat income tax by 2020.

Other questions for LaBonte centered on increases in the cost of education, and crafting regulation following the legalization of recreational marijuana.

During the discussion, LaBonte also touched on LePage’s aim at the “welfare state” in Maine. The governor’s budget proposes to eliminate the municipal General Assistance program, which assists residents with essential needs such as rent, food and utilities.

The move would have an immediate impact in Lewiston and Auburn, which have both reported increases in their General Assistance budgets.

The budget would also reduce time limits in the Temporary Assistance for Needy Families program from five years to three years and eliminate MaineCare eligibility for “able-bodied” parents with earnings over 40 percent of the federal poverty level.

The budget also proposes cutting about 500 state employee positions and launching a “vacancy study” to further reduce the size of the workforce.

To take effect on July 1, the start of a new fiscal year, the budget must pass by a two-thirds majority in both chambers of the Legislature.

Jonathan LaBonte, director of the Office of Policy and Management for Gov. Paul LePage and the mayor of Auburn, speaks during a Maine Heritage Policy Center luncheon at the Hilton Garden Inn in Auburn on Monday.

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