In April 2024, Governor Janet Mills of Maine exercised her veto power against Legislative Document 1231 (LD 1231), a bill designed to restructure the state’s income tax brackets. The proposed legislation aimed to reduce taxes for middle-income earners while increasing the tax burden on higher-income residents. Governor Mills’ decision to veto the bill was influenced by concerns over its potential economic impact and the legislative process through which it was advanced.
Background of LD 1231
LD 1231, titled “An Act to Bring Fairness in Income Taxes to Maine Families by Adjusting the Tax Brackets,” sought to modify Maine’s existing tax structure by introducing new tax brackets. The bill proposed increasing the top income tax rate from 7.15% to 8.45% for individuals earning over $500,000 and married couples earning over $1 million. Concurrently, it aimed to expand the lower tax brackets to provide relief for middle-income earners. The intent was to create a more progressive tax system that would alleviate the financial burden on middle-class families while generating additional revenue from the state’s wealthiest residents.
Governor Mills’ Rationale for the Veto
In her veto message, Governor Mills acknowledged the well-intentioned nature of LD 1231 but expressed reservations about its effectiveness and the process by which it was developed. She noted that while the bill aimed to provide tax relief, it did not offer meaningful benefits to low-income taxpayers due to existing deductions and exemptions. Moreover, she highlighted that Maine’s current top tax rate of 7.15% is already the 10th highest in the nation, and increasing it could pose challenges for state budgeting by making the state’s revenue more reliant on a small, volatile group of taxpayers.
Governor Mills also criticized the legislative process, pointing out that LD 1231 began as a concept draft without specific language, which limited public input and transparency. She emphasized the importance of a thorough and open legislative process, stating that the manner in which the bill was advanced deprived the public of a meaningful opportunity to be heard.
Reactions to the Veto
The veto of LD 1231 elicited varied responses from different stakeholders. The Maine Center for Economic Policy (MECEP) expressed disappointment, suggesting that the bill was a step toward tax fairness by asking the wealthy to contribute more. MECEP’s president, Garrett Martin, stated that while the bill wasn’t perfect, it aimed to address the disparity where multimillionaires pay the same income tax rate as individuals earning $62,000 annually.
Conversely, the Maine Policy Institute commended the veto, arguing that increasing the top income tax rate would have undermined the state’s economic competitiveness. They highlighted that Maine’s top income tax rate is already among the highest nationally and that further increases could exacerbate tax disparities with neighboring states like New Hampshire.
Governor Janet Mills: A Brief Profile
Born on December 30, 1947, in Farmington, Maine, Janet Trafton Mills has dedicated much of her life to public service. At 77 years old, she holds the distinction of being Maine’s first female governor, having assumed office on January 2, 2019. Before her governorship, Mills served as the state’s Attorney General and was a member of the Maine House of Representatives. Her extensive career reflects a commitment to justice and public welfare.
Regarding her financial standing, specific details about Governor Mills’ net worth are not publicly disclosed. As governor, her annual salary is $70,000.