Analysis

Maine improved its standing significantly between 2007 and 2009, especially on fiscal policy. Its rural character has preserved its relatively free firearms regime, but it also has very high overall tax collections. However, nonfuel, nonseverance taxes as a percentage of the economy fell from 13.1 percent to 11.9 percent and the state has gone from second worst to fourth worst. Property, sales, and individual income taxes are all high, but property and sales taxes have fallen. There is evidence that local governments are becoming cash-strapped as a result. The first offense of low-level marijuana possession carries only a fine, and low-level cultivation is a misdemeanor. The state also has medical-marijuana exceptions, and the maximum sentence for a single marijuana offense is 10 years. Educational policies are about average; the state could improve substantially here by ending standardized-testing requirements for homeschoolers and requiring parental notification only once (or never) rather than annually. Maine has a good asset-forfeiture regime and allows same-sex partnerships. Cigarette taxes are high, and smoking bans are airtight everywhere. The federal minimum wage has caught up with Maine’s. The state has adopted strict community rating for health insurance, banned elimination riders, and has legislated many mandates (a bad combination, since price controls and heavy regulations are likely to drive profit margins close to zero and thus drive private insurers out of state). The state does boast a good liability system, but it could stand to reform eminent domain further. Maine has pulled back on its public election-financing program, no longer offering it to parties.

Policy Recommendations

1. Reduce standardized testing and notification requirements for homeschoolers.
2. Deregulate health insurance in the noted categories.
3. Enact blight reform and a full ban on private-toprivate eminent-domain transfers, then codify these provisions in the state constitution.