Question 2: Do you want to add a 3 percent tax on individual Maine taxable income above $200,000 to create a state fund that would provide direct support for student learning in kindergarten through 12th-grade public education?
To raise more money for public education, Mainers will decide on Nov. 8 whether to approve a tax surcharge for those with incomes of more than $200,000 a year.
It would raise millions of dollars in new revenue — $142 million in 2017 and $159 million in 2018, according to Maine Revenue Services. Maine has about 16,000 households with annual incomes higher than $200,000, according to the agency.
That 3 percent tax surcharge money would go into a Fund to Advance Public K-12 Education, which would go out to school districts in 2018.
Money from the fund could be used for direct instruction, including more teachers, ed techs, guidance staff and librarians. The money could not be used for administrative or clerical staff.
The referendum is different from one passed in 2004 to boost the state share of education spending to 55 percent, which never happened. This year’s Question 2 designates where the money would come from; the 2004 referendum left it up to state legislators to find the money.
Question 2 has attracted a lot of support and opposition.
Yes on 2
The Maine Education Association, which is a statewide teachers’ union, brought the referendum to the ballot.
“It’s a simple solution to a number of problems facing Maine for over a decade; our schools are underfunded,” said campaign manager John Kosinski, who’s on leave from the MEA. The state has not met its obligation to fund education at 55 percent as passed by a 2004 referendum, he said.
“The more the state cuts education funding, the more we rely on property taxes and the more inequities there will be for kids,” he said.
Poorer school districts are struggling to pay for education, while wealthier communities can raise the money, he said.
Recent tax cuts for the wealthy have left schools in this predicament, Kosinski said.
“Maine has a rigged tax code,” he said. “Someone earning $40,000 pays the same (rate) as a millionaire. That’s not right. There have been huge tax cuts passed by politicians that benefit the wealthier Mainers.”
He said that because the referendum would affect only Maine’s top earners, the higher tax for education would help Maine’s economy.
It would not drive people from Maine or keep people away, Kosinski said. “It’s going to spur economic development. Once we have the best schools, businesses will take notice. They will want to do business in Maine.”
Passage would also boost funding for pre-kindergarten programs; 29 percent of Maine school districts don’t have pre-K because they don’t have money for startup costs.
It would also direct $3.5 million more, or 16 percent, of state funding to expand high school career and technical education centers.
The centers are effective in turning out skilled high school graduates, “but these programs have been woefully underfunded” and often have waiting lists, Kosinski said.
• State spending on education: In 2010-11, the state spent a total of $931.4 million on K-12 education, 48.8 percent of the total cost. In 2015-16, the state spent $983.6 million on education, 46.5 percent. Source: Maine Department of Education
• Tax cuts: Maine taxes have been cut for many Mainers, including those earning $40,000 and those earning $1 million. In 2011, Maine’s highest income tax rate was 8.5, which kicked in when an individual earned $20,900, said David Heidrich, Director of Communications for the Department of Administration and Financial Services. In 2017, the top tax rate will be 7.15 percent, which will kick in for individuals earning $50,000.
No on 2
Opposition is led by the Maine State Chamber of Commerce, which has formed a “No on 2” political action committee.
“We do support education,” said Dana Connors, the longtime head of the chamber. “We simply do not support this question. It’s the wrong solution. It’s wrong economically and educationally.” The ballot question looks straightforward, “but it’s misleading,” he said.
The extra money raised would go for salaries, not school supplies or building needs, Connors said. While it will raise revenue directed to education, there’s no guarantee that will happen, Connors said, because state legislators have the say on where General Fund money is spent.
“There’s talk of a special fund for education,” Connors said. “There is no special fund.”
Jim Rier, a former education commissioner opposed to Question 2, said many school districts, such as Cape Elizabeth and Falmouth, are raising significantly more local tax dollars for education than what they receive from the state. That means the total spent in those southern Maine schools per student can be 30 percent higher than poorer districts that can’t raise more taxes.
“Question 2 would exasperate the equity by flowing more money to communities already spending more,” Rier said.
The 3 percent added tax to incomes over $200,000 would mean Maine would have among the highest income tax in the country next to California, Connors said.
The higher tax would apply to family small businesses and joint filers. An income of $200,000 “is billed as the wealthy,” Connors said, but an income above $200,000 isn’t wealthy for a small family businesses or some joint filers.
Some doctors and other high earners in the medical profession are considering not staying in Maine because of the possible 3 percent extra tax, he said.
“We want to grow our economy,” Connors said.
* Legislation behind the referendum said if passed “The Fund to Advance Public K-12 Education” would be established, that the money is to supplement and not supplant school funding appropriations, that “100 percent of the revenue from the surcharge must be deposited each year into the fund.
* The referendum is not a constitutional amendment, which means future state legislators could pass more laws to cut education funding or undo the higher tax for education.