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W W W. M A I N E B I Z . B I Z 11 A P R I L 6 , 2 0 1 5 200 Maine businesses support proposed national park An eff ort to establish a national park in the Katahdin region has received backing from a group of more than 200 Maine business owners. e Natural Resources Council of Maine on March 26 said that the group, mostly con- sisting of businesses from the greater Katahdin and Bangor regions, sent a letter to Maine's congressional del- egation in support of the proposed, 150,000-acre national park and recre- ation area, which would be created on what is now privately held land east of Baxter State Park. e group also released the "conceptual framework" for federal legislation the group would support in creating the park. Robert Lilieholm, a University of Maine resource economist, was present at a press conference held by the Natural Resources Council of Maine to make the announcement. He helped conduct two economic studies in 2013 fi nding that a national park and recreation area in the Katahdin area might create 450 to 1,000 jobs. G ov. Paul LePage has been on the road selling the sweeping tax reform package within his two-year, $6.57 billion budget. He provides this rationale: "A modernization of the sales and income tax bases, a lowering of income tax rates and elimination of the estate tax will align Maine's state tax system with the 21 st Century economy, make the state more competitive, con- tribute to long-term economic growth, protect lower- and middle-income households from shouldering more of the tax burden and provide a simpler, more stable revenue base to meet the state's spending commitments." Joel Johnson, an economist at the Maine Center for Economic Policy, challenged those assertions at a Feb. 17 hearing on the governor's proposals, stating they "would drive state rev- enue as a share of the state economy to historically low levels, setting Maine up for fi scal crises down the road, espe- cially during times of recession or slow economic growth. is reduction in rev- enue will force cuts to education, health care and local communities, which, in turn, will undermine the foundation of a strong, sustainable Maine economy." Which vision is correct? Pierce Atwood's state and local tax practice has compiled a useful guide to learn what's at stake. Here's a quick overview of the governor's plan: Income tax: Beginning with the 2016 tax year, the top individual income tax rate would be lowered gradually from the current 7.95% to 5.75% by 2019. Beginning with the 2017 tax year, the top corporate income tax rate would be lowered gradually from the current 8.93% to 7.5% by 2021. Estate Tax: e estate tax exemp- tion would be increased from $2 mil- lion to $5.5 million for the estates of individuals who die in 2016. e tax would be eliminated starting in 2017. Sales and Use Tax: General sales- and-use tax rate would increase to 6.5% (from the current 5.5%). Lodging taxes would remain at 8%. e tax on pre- pared foods (including alcohol) would drop to 6.5% (from the current 8%). e service provider tax would increase to 6% (from 5%). e tax on short-term auto rentals would decrease to 8% (from 10%). e tax base would increase dramatically by eliminating exemptions on a wide range of goods and services. Property tax: Business equipment eligible for the Business Equipment Tax Reimbursement (BETR) program would be transitioned to the Business Equipment Tax Exemption (BETE) program over a four-year period, with BETR fully eliminated in 2019. Municipal revenue sharing would be funded for the fi scal year begin- ning July 1, but would be eliminated the following year. e exemption for nonprofi t entities, other than churches, would be limited to the fi rst $500,000 of value and 50% of the excess above $500,000. e proposals are now being scrutinized by the Legislature's Joint Standing Committees on Appropriations and Financial Aff airs and Taxation. Stay tuned. How could LePage's sweeping tax plan affect your business? P O L I T I C S & C O. B Y J A M E S M C C A R T H Y Hosted PBX Phone Systems | Hosted File Sharing, Backup , Backup , and Recovery | Access to New Fiber Ne r Ne r tw tw t orks an and more… Leverage your broadband. Imagine the possibilities. Broadband is just the beginning. Save time, save money and say goodbye to costly capital investment by leveraging the broadband you already have. We'll show you how. toll free: 866 494 2020 | www.gwi.net Read Pierce Atwood's full report at pierceatwood.com/ maine-governor-proposes- major-state-tax-restructuring @ N O R T H E R N & E A S T E R N

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