Legislature Rejects
Tax
Proposals to Help People with Low Income
The Legislature rejected two important tax bills that would have benefited people with low
income in Maine.
The Circuit Breaker Program, also known as the Maine Residents Property Tax and Rent Refund
Program, gives a tax refund to homeowners and renters who spend a high percentage of their
income on housing related expenses.
Maine Equal Justice, MAIN and many allies supported LD 474,
An Act To Reduce the Property Tax Burden and Improve the Circuitbreaker Program. This bill
would have increased the maximum refund benefit by 20%. It also would have streamlined the
program to increase participation. The Taxation Committee did not support this bill.
Unfortunately, the final state budget also cut the program’s funding by 20%. Despite this
defeat, we will continue to work to improve this important program in future legislative sessions.
This is a program that helps put money back in the pockets of low to moderate income households
that spend a disproportionate amount of their income on housing costs.
The Maine Earned Income Tax Credit (EITC) is a tax credit for lower-income workers. The bill,
LD 695, An Act To Reduce Taxes and Promote Employment, would have expanded the Maine Earned
Income Tax Credit (EITC) from 5% to 10% and made it refundable.
These changes in the EITC program would have addressed a basic problem in Maine – the fact
that the cost of raising a family continues to grow while wages for low and moderate income
households are not keeping up. Maine was one of the first states to implement a state Earned
Income Tax Credit but we have fallen behind. Other states have expanded their EITC programs
to address child poverty and lower the tax burden for low-income households. LD 695 would
have helped Maine do the same. Many people supported the bill and testified in its favor
before the Taxation Committee. Unfortunately, it failed to get the votes necessary to
pass in either the House or Senate. Again, MEJP and MAIN will continue our advocacy to
strengthen the State EITC program so that it is more effective in helping working Mainers
make ends meet.
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