If a petition drive to put a Taxpayer’s Bill of Rights on this year’s ballot passes muster in court, its chances of being adopted could come down to whether voters think Gov. John Baldacci’s tax reform initiative is working.
Also in play is how voters here view the experience of Colorado, which was the first state to adopt a Taxpayer’s Bill of Rights, or TABOR, in 1992. That state suspended the program last year after it cut too deeply into aid for K-12 education, and three other states – California, Missouri and Washington – have shelved their tax and spending limits as well.
A third factor, opponents of TABOR believe, is voters already have shown their distaste for tax and spending caps here, having overwhelmingly defeated the so-called Carol Palesky 1 percent tax cap in November of 2004.
“It’s a similar situation to Palesky,” said Christopher “Kit” St. John of the progressive Maine Center for Economic Policy. “It might be initially appealing, but over time that could be turned around.”
A tougher challenge, St. John said, is many people still haven’t felt the effects of the governor’s tax reform initiative, which increased school aid to help lower property taxes.
“It doesn’t reach everybody,” he said, because the new school aid formula takes into account a community’s property values and school enrollment, and the increased aid is being rolled out over four years.
“Anybody who walks down any Main Street knows many, many voters are very concerned about the level of taxation,” St. John said, and a December poll he saw showed a considerable number of voters believe “taxes are too high.”
But voters also said they wanted to increase aid to education. In a special election held in June 2004, 55 percent of the less than 200,000 people who voted supported increasing state aid to education to 55 percent in order to reduce local property taxes.
“The mandate to spend more,” on education, and “the mandate to freeze,” as proposed by TABOR, can’t co-exist, St. John said, and it was those same competing interests that convinced voters in Colorado last year to put their spending cap on hold.
How TABOR works
The TABOR being proposed for Maine is similar to Colorado’s in that it would allow spending at the state and local level to increase at the rate of inflation plus population growth. If inflation is 2 percent, for example, and the population grows by 1 percent, spending could increase 3 percent.
Spending overrides would have to be approved by voters, as would any tax or fee increases, from the now automatic gas tax increase that fuels the state’s highway fund to the cost of local permits.
Where Maine’s proposal differs, however, is that instead of rebating back to residents all taxes raised in excess of the spending cap, 20 percent would be put into a budget stabilization or rainy-day account, to help fund government programs in the lean times. The limit on the rainy day account would be 10 percent of the state budget, for example, $300 million on a $3 billion budget.
Ed Cervone, who lived in Colorado under its TABOR and now works for St. John’s organization, said the problem is the cost of government programs and services goes up much faster than the formula allows.
“Inflation goes up at a much slower rate than the cost of transportation, health care or education,” Cervone said. “It doesn’t slow growth; it stops growth. It shrinks government,” he said of TABOR, and “never allows for an ideal size.”
That leads to the problem in Colorado, he said, where after so many years of TABOR there simply isn’t enough spending power to pay for increased costs of government in areas like K-12 education.
Palesky vs. TABOR
“If Palesky was an axe to the head, TABOR is a knife that slices a piece of your head off every year,” Cervone said.
Bill Becker, the head of The Maine Heritage Policy Center – a conservative think-tank based in Portland – thinks Cervone has it backward.
“There is no reason government should grow faster than our ability to pay, or grow faster than the growth in the economy,” he said.
As for concerns about running out of money for things like education, Becker said that’s why his group, which penned the version of TABOR that would appear on the Maine ballot, put in a rainy-day fund.
“You control spending in the good times so you don’t have to cut back in the bad times,” Becker said.
He also takes issue with its comparison to the Palesky plan.
“It’s not a property tax cap,” he said, but a control on spending.
“I think it’s going to be viewed through the prism of Palesky to a certain extent,” said Dennis Bailey, a public relations consultant who worked to defeat the tax cap referendum. “It’s tough to overcome that this isn’t just ‘son of Palesky.'”
“That being said, the forces behind this one are a little more sophisticated than the Palesky forces were. Sometimes I didn’t feel like we had an engaged opponent,” in the Palesky fight, said Bailey, who was press secretary for former Gov. Angus King before starting his own company. “Mary Adams…is much more engaged.”
Adams, a tax crusader who helped defeat a statewide property tax in 1977, led the petition drive to get TABOR on this year’s ballot and had the required number of signatures certified by the Secretary of State last week. That certification is now being challenged (see related story), but Adams believes she will prevail.
Bailey isn’t so sure.
“Some of the steam has been taken out of that fervor” that was so evident in the early days of the Palesky campaign, he said. “I don’t see it all revved up like it was.”
Still he admits making the argument that people are now getting tax relief under the governor’s plan won’t be easy.
“I’m not sure that’s going to be any easy sell either,” Bailey said.
Send questions/comments to the editors.
