Under the Dome: Inside the Maine State House

Pierce Atwood LLP

Under the Dome: Inside the Maine State House provides a high-level overview of recent activity at the Maine State House.

Double Whammy in Maine’s Paper Industry

This past week, two northern Maine paper mills announced sad news.  First, Lincoln Paper and Tissue in Lincoln announced that it is filing for Chapter 11 bankruptcy protection, adding that it is hopeful that a buyer will emerge when the assets go out to auction in 45 to 60 days.  The very next day, Expera Old Town announced that it is closing its mill at the end of the year.  Expera has given no indication of a future owner or operator of the mill.  Combined, these announcements affect nearly 400 employees.  The Maine Pulp & Paper Association responded with a call to action to attend its summit on November 17 where industry leaders and policyholders will seek a new approach to resolving chronic issues.  The remaining 4,500 direct mill jobs in Maine, which also create multiple times that number of indirect jobs, are high quality and the markets remain strong.  The challenge is to lower costs that far exceed the costs incurred in other papermaking states and countries, including costs of fiber, energy and transportation. 

Lots of Issues Expected on 2016 Ballot

Mainers can expect to see a number of citizen initiatives on the November 2016 ballot.  The Republican Party has started the paperwork to have a question on the ballot related to tax and welfare reform which will propose to significantly reduce the state income tax and impose greater restrictions on welfare benefits.  Maine is one of few states that allows more than one issue to be addressed in a single referendum question.  Other potential citizen initiative questions may tackle issues such as raising the minimum wage, background checks for firearm purchases and legalizing marijuana.  In order to appear on the November 2016 ballot, each initiative must collect more than 61,000 valid signatures and submit them to the Secretary of State before February 2016.   

Maine Unemployment Numbers Down

The Department of Labor recently reported on the August 2015 Maine unemployment numbers.  According to the data, Maine’s unemployment rate in August was 4.5 percent, less than the national unemployment rate of 5.1 percent, and more than a point less than the rate reported for August 2014.  This is Maine’s lowest unemployment rate since April of 2007.  The data also shows a total of just more than 31,000 Mainers actively looking for work, down from almost 40,000 a year ago.

Yet Maine Economy Lacking Growth

Despite the positive unemployment rate trend, the latest statistics from the Bureau of Economic Analysis show that Maine’s gross domestic product ("GDP") growth is lower than the national average.  Over the past year, the GDP stayed flat in Portland and declined in Lewiston-Auburn and Bangor.  Experts speculate that Maine’s demographics and lack of workers are a factor for the lack of growth.

Maine Tax Rating in the News

A recent national report ranked Maine as one of the “least tax friendly” states.  These findings were based on an online tax comparison of all states.  However, another report, issued by Truth in Accounting, recently stated that Maine’s tax burden had significantly decreased.  Depending on what data is being referred to, both reports have validity.  As mentioned above, Mainers are expected to vote on tax issues next year at the polls. 

Increase Sale in Liquor May Lead to Decrease in Income Tax

The state’s revenue system got a boost of more than $46 million from state liquor sales. These revenues first are dedicated to repaying a bond that was issued to repay a $220 million debt to Maine hospitals, then the remaining $15.6 million is split among a number of state funds, including the state’s general fund, the Department of Environmental Protection’s Clean Water fund and the Department of Health and Human Service’s Drinking Water fund.  This significant increase in revenue is attributed to the new state marketing contract with Pine State Trading Company, which was designed to entice shoppers to purchase liquor in Maine rather than New Hampshire.  Maine’s Republican Party hopes to use the increased revenues from the liquor sales to help eradicate the state’s income tax.

Senator Collins Reaches Milestone

Just a couple of weeks ago Maine’s Republican Senator, Susan Collins, became only the third U.S. senator to ever cast 6,000 consecutive votes. At over 7,000 votes cast, Senator Chuck Grassley is the only other sitting senator to have cast more consecutive votes. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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