Maine Gov. Janet Mills says she'll back 'millionaires tax' in Democrats' budget plan

Maine Democratic Gov. Janet Mills says she'll support a new tax on millionaires, a reversal from her previous position.

The governor's announcement came shortly after Democrats on the legislature's budget committee included the tax in a change to the state's two-year budget. The 2% tax would apply to a resident's taxable income above $1 million for single filers, $1.5 million for heads of households and $1.5 million for joint filers.

The legislature's nonpartisan budget office estimates that the tax will affect about 2,600 tax filers and bring in $150 million over two years.

Mills, who is running in a competitive Democratic primary for the U.S. Senate, opposed the tax when it was first floated last year as a method to fund local education costs. Her associate commissioner for tax policy, testifying on her administration's behalf, argued that it would be a volatile source of revenue.

But in her statement, the governor said the tax will protect recent education and health care investments while also being used to provide property tax relief.

"It is crucial that we maintain these important investments for Maine people into the future, especially as we face such economic uncertainty because of actions of the Trump Administration," she said. "So, when the Senate President and the House Speaker asked me whether I would support a surcharge on the very wealthiest in the supplemental budget in order to continue funding these investments, I agreed, and I requested that that revenue be used in part to provide property tax relief for hardworking Maine people who are feeling the pinch."

A draft of the budget bill is still in development, so it's unclear if it will specifically direct a portion of the millionaires tax to one of the state's property tax programs, although Democrats on the budget panel did vote to increase the property tax fairness credit.

This story is a production of the New England News Collaborative. It was originally published by Maine Public.