New Hampshire should be very wary of Gov. Paul LePage

D.J. Bettencourt
D.J. Bettencourt

By: DJ Bettencourt – August, 2013

As a general rule, when liberals lash out with nasty hyperbole against a political leader you can be almost assured that they are doing a good job.

Such is the case with Maine’s Governor, Paul LePage. For those of us in the Granite State, we see Maine as a place that rivals New Hampshire in natural beauty and Yankee toughness but scoff at its confiscatory tax structure and obese welfare system.

While New Hampshire boasts the distinction of having one of the lowest tax burdens in the nation, Maine has one of the highest. According to the non-partisan Tax Foundation, “Maine’s 2010 tax burden of 10.26% ranks 9th highest out of 50 states, and is above the national average of 9.9%. Maine’s taxpayers pay $3807 per capita in state and local taxes.” By comparison, New Hampshire has no personal income or sales tax and our “2010 tax burden of 8.11% ranks 7th lowest out of 50 states, and is below the national average of 9.9%. New Hampshire’s taxpayers pay $3717 per capita in state and local taxes.”

Even more astonishing is Maine’s welfare rolls. According to the 2012 census, 4.8% of Maine households receive public assistance through the Temporary Assistance for Needy Families (TANF) program, the second highest rate in the nation and more than twice the national average of 2.3%. Additionally, Maine’s Medicaid program is also the second largest in the county, with 27% of state residents receiving publicly funded health care. New Hampshire, by contrast, has only 11% of its population in the program. Maine allows families earning up to 200% of the poverty level to receive MaineCare benefits while the federal standard is 133%.

Enter Paul LePage, who surprised Maine’s political establishment by winning a crowded Republican primary and a three-way general election for governor in 2010 after previously serving as Mayor of Waterville and General Manager of Marden’s Surplus and Salvage stores. He campaigned on a simple assertion that immediate fiscal reforms were needed across state government because Maine was on an unsustainable path and almost broke. It was a message for fiscal reform that had not been seen in decades.

However, what has astonished Maine’s establishment even more than LePage’s election has been his commitment to actually delivering on his campaign promises. He immediately tackled spending and taxes by implementing zero-based budgeting and guiding through the legislature a significant tax cuts for both individuals and businesses. Specifically, he produced $150 million in tax relief and reduced Maine’s top income tax rate from 8.5% to 7.95%, while eliminating tax payments for 70,000 low-income residents. It represented the largest tax cut in Maine’s history.

On welfare, LePage’s message to able-bodied welfare recipients was blunt: “Get off the couch and get a job.” To provide them with motivation, he placed a five year limit on welfare eligibility, implemented drug testing on some welfare recipients, and eliminated benefits to noncitizens. He has further proposed blocking convicted drug felons from receiving public assistance and prohibiting the use of food stamps to buy junk food.

While liberals blasted the governor as a “mean bully” and labeled his tax reforms with their well-worn meme of “tax cuts for the rich,” LePage’s reforms produced results. Last month Maine’s unemployment rate fell to 6.9%, down from 7.1% in March and 7.3% from a year ago. It is the lowest rate since 2008.

Last year the Tax Foundation moved Maine up a dramatic 7 slots in their business tax climate rankings, citing LePage’s reforms. His business friendly tone that “Maine is open for business” and his efforts to limit the damage inflicted by Obamacare has sent a reassuring message to Maine’s business community that has paid off and threatens the “New Hampshire Advantage” of taking advantage of our neighbors’ high income and sales tax rates to generate prosperity.

However, it is LePage’s promise if re-elected in 2014 that should alarm Granite Staters. This week LePage pledged to eliminate Maine’s income tax in a second term. Currently, Maine’s income tax rate ranks 8th highest among states levying an individual income tax. LePage’s message to New Hampshire could not be clearer: Maine is serious about competing with us economically. He represents our biggest external economic threat.