Maine State Chamber Opposes New Income Surtax in Supplemental Budget

AUGUSTA, Maine — The Maine State Chamber of Commerce today expressed strong opposition to the supplemental budget proposal advanced by the Legislature’s Appropriations and Financial Affairs Committee that would catapult Maine’s marginal income tax to the highest level in New England.

According to the state’s Consensus Economic Forecasting Commission, Maine’s employment outlook has weakened, with projections revised from modest growth to a decline in 2025 and little to no job growth expected through the end of the decade.

“This tax increase represents a major step backwards for Maine’s competitiveness. Maine has very little margin for error to attract investment, grow jobs, and alter our state’s economic trajectory,” said Patrick Woodcock, President and CEO of the Maine State Chamber of Commerce. “This is not the time to impose additional taxes on our entrepreneurs, small businesses, and disincentivize attracting new businesses and residents to our state.”
Early this morning, the Committee advanced legislation that includes a 2% surtax on an individual’s income over $1 million, raising Maine’s top marginal income tax rate to 9.15%, as well as a proposal to deplete $324 million from the Budget Stabilization Fund to finance one-time payments. For many Maine small businesses, this proposal would directly impact the capital they rely on to reinvest in their operations and workforce.

“These changes send the wrong signal to employers, investors, and entrepreneurs, and the depletion of our Budget Stabilization Fund is fiscally irresponsible,” Woodcock said. “Many Maine businesses — particularly small and family-owned companies, would feel the direct impact of higher income taxes, reducing their ability to reinvest, grow, and hire.

“At a time when our economic outlook is uncertain, those resources should be focused on strengthening Maine’s long-term growth potential,” Woodcock said. “Investments in research and development, housing-enabling infrastructure, and workforce growth will deliver far greater returns for Maine people and businesses.”

The Maine State Chamber emphasized that there is still time for policymakers to align around a forward-looking, pro-growth strategy as the budget process continues.

“We remain committed to working with lawmakers on both sides of the aisle to advance policies that support Maine’s economy, strengthen our competitiveness, and create opportunity across the state,” Woodcock said.