e-Tack 3/29/2017 (Mar 29, 2017)

If you were not at the meeting on March 29, 2017, then you did not hear Governor Lepage speak. First, it was striking to see the Governor's weight loss. I think most of us know that he had some form of stomach surgery to aid in his weight reduction, but the transformation is amazing. It also seems that his weight loss may have also improved his demeanor to some extent. Some of the information he provided was quite striking and, if it is accurate, then it is difficult to argue with. For example, New Hampshire has no income tax and no sales tax and has the seventh highest real estate taxes in the country. Maine has one of the highest income taxes in the country and sales tax and yet we are the ninth highest taxed state for real estate taxes in the country. While it would seem we have a taxation problem, I would suggest that we also have a spending problem if we need that much revenue.

He also shared with us that the cost of solar power is astronomically higher than the cost of electricity generated from coal, natural gas, hydro and bio-energy from forest produce. He indicated that 64% of Maine's electricity comes from renewable sources. That is very good news environmentally, but it is very bad news economically because the cost of renewable energy is substantially higher than other sources. One of the results of these higher energy costs is certainly the loss of some industries in Maine that have found that they can substantially reduce their fuel costs by going south or to other countries. The Governor is clearly an advocate for hydro-electric power and bio-energy, but the bottom line is that the state needs to bring down its energy costs in order to attract new businesses and keep existing businesses.

Switching back to taxation, the statistics regarding states with and without income taxes and their economic growth over the last several years are incredibly striking. States without income taxes have experienced substantial economic growth over the last several years while states, like Maine with income taxes, have seen an actual drop in economic output. Unfortunately, the 3% tax that the people of Maine just approved for families earning over $200,000.00 which includes limited liability companies and S-corporations will result in less high earners choosing to relocate to Maine and will force retirees to move to states like Florida which have no income tax. Moving to Florida for a retiree is an instant 7% raise and, if they generate more than $200,000.00 a year, it could be a 10% raise.

The interesting thing about the 3% tax is that it was designed to provide funds for teacher salaries and benefits. The reality is that Maine has a constitutional provision that requires the state to fund 55% of the costs of education, but the state has not funded 55% of the cost of education for many of its communities and that is particularly true for communities with larger tax bases. The more rural communities may be receiving 55% of their education costs from the state, but communities like Biddeford and Sale do not. Governor Lepage is pointing out that he has not been reducing expenditures for education and, in fact, has been increasing state expenditures for education while the number of students in grades K-12 has actually diminished significantly over the last few years down to a total of approximately 177,000 students. Governor Lepage's argument is that Maine expends a very low portion of its overall education dollars in the actual classroom as compared to other states. He argues that too much money is spent on administration and other fixed administrative costs that could be reduced with some centralization of those services. Apparently, Maine has 174 superintendents statewide which means that each superintendent is responsible for less students than most high schools have throughout the country. He pointed out that Florida has 3 million students K-12, but yet it only has 64 superintendents throughout the state.

The bottom line is that I think we are all sick and tired of giving close to 50% of our income to the local, state or federal government. While many people may not like the Governor's approach, it is difficult to argue that the concept of lowering taxes by bringing spending into control and increasing earnings in the state which can be taxed at reasonable rates to cover the necessary costs of running our government. Perhaps if more people listened to what the Governor was saying as opposed to fretting about how he says it, we would all be better off.

Foundation Day

Brian Dallaire mentioned that on April 19, 2017 we will have our Second Annual Foundation Day. Everyone in the Club is encouraged to bring in a check or cash for the Rotary Foundation. If you have already contributed to the Foundation, we will be able to verify that. While we have not come up with a specific dollar figure, I will give you the "rules" for the fun part of the meeting. Say for every $10 you contribute to the Foundation, you will receive a raffle ticket. The raffle tickets will go into a pot. One by one we will draw raffle tickets. If we call your number you will get to pick from a table full of swag donated by our members. Each time someone selects a piece of swag, they will be able to trade it with someone who might have already selected an item. The final person whose raffle ticket is selected will have the choice of any item already picked in the room. It is our modified version of a yankee swap.

To make the Foundation Day work, we need three things. First, we need people to show up at the meeting. Second, we need members to donate swag from their respective businesses or perhaps a gift card that they might have kicking around. And third, we need everyone to donate to the Rotary Foundation. Again, if you have already donated, we will be able to pull that list, but if you did not donate during Lucie's year, please plan on bringing in a check or cash made payable to the Foundation. This should be a fun way to help support the Foundation and to help Lucie meet her Foundation-giving goals. If you have any questions about Foundation Day, please contact any member of the Foundation Committee including its Chair, Brian Dallaire.

Have a great week!

Environmental Impact:

Fill up those green bags. If you need more bags and/or labels, just let Julie Villemaire know and she can hook you up…no charge!