Unless the Legislature acts this session to pass L.D. 1746, which has strong bipartisan support, universal access to life-saving phone service may be at risk in Maine.
Maine has long been a leader in ensuring that its most vulnerable citizens – including low-income seniors, veterans and single parents – have access to essential telephone services. This principle is called “universal service,” and includes making sure that every Mainer has access to a phone.
A key part of universal service is a Reagan-era federal program known as “Lifeline” – which is very aptly named. Under this program, income-eligible households have access to low-cost or no-cost phone service that permits individuals to get and maintain jobs, arrange child care or make necessary health appointments. About 28,000 Mainers currently rely on Lifeline phone service.
The federal Lifeline program is supported entirely by a federal subsidy of $9.25 a month, per customer. Maine taxpayers do not shoulder any costs of the program.
Unfortunately, at a time when Lifeline service is under attack in Washington, Maine Revenue Services has compounded the problem by starting to assess sales-type taxes on the federal money used to support Lifeline phone service. If Maine’s policy remains in place, it is very possible that the telephone providers who offer Lifeline phone service may be unable to continue such service.
Significantly, Maine appears to be the only state in the country trying to assess sales-type taxes on the federal Lifeline subsidy. While Massachusetts started assessing such a tax, that state recently backed away after the policy was challenged.
Maine’s unprecedented policy effectively imposes sales taxes on those Mainers least able to pay. This unfortunate policy is no different from taxing food stamps or low-income fuel assistance, which Maine does not do – for good and obvious reasons.
Given how important communications have become to everyday life, if Lifeline phone service is diminished or eliminated in Maine, the consequences would be serious. Without access to a phone, how will low-income Mainers be able to get critical services such as health care, legal services or child care? Finding and keeping a job will become extremely difficult without access to a phone. Isolated seniors will struggle to remain connected to family.
Fortunately, just as Sen. Susan Collins is working on behalf of Mainers to confront the attack on Lifeline in Washington, the Maine Legislature can also work to save Lifeline locally. L.D. 1746 was introduced this legislative session on a bipartisan basis, and it directs Maine Revenue Services to stop assessing sales-type taxes on the federal Lifeline subsidy. The bill is sponsored by state Sen. David Woodsome, R-York, and the principal co-sponsor is Democratic state Rep. Seth Berry of Bowdoinham. The bill is supported by a broad coalition of organizations and business, including AARP Maine, Legal Services for the Elderly, Maine Equal Justice Partners, the Maine Community Action Network, the Maine Public Advocate and several phone service providers.
Earlier this winter, the Legislature’s Joint Standing Committee on Energy, Utilities and Technology unanimously supported L.D. 1746, and the committee recently made the bill one of its top priorities to be funded. The bill has made its way through the House and Senate, and it now sits in front of the Appropriations Committee, waiting to be funded – if the Legislature goes back into session.
The current cost of the bill is about $300,000, but there are strong arguments as to why the cost should be much lower, or removed altogether. For example, the fiscal note assumes there are nearly twice as many Lifeline customers as actually exist in Maine. Moreover, the fiscal note assumes that the state budget forecast includes revenues from this ill-advised tax, even though no documents have been produced supporting this assumption.
This is one of the most important bills before the Legislature. We also understand the importance of bills to address indigent health care and the opioid crisis. However, this shouldn’t be an either/or debate. In order for health and drug treatment services to effectively reach the very people they are designed to help, these individuals will also need access to the phone service that L.D. 1746 is designed to preserve.
In short, if we want to ensure that Maine’s most vulnerable citizens have access to health care, child care and employment, and can stay connected in times of need, the Legislature must pass L.D. 1746. For the money, it’s the best deal going.