The head of the Maine State Chamber of Commerce says if his board members had to vote today on whether to support the Taxpayers Bill of Rights on the November ballot, they probably would do so with a qualified “yes.”
“The status quo is not acceptable and that encourages people to vote yes,” said Chamber President Dana Connors. “If my board decided today, I think the leaning would be toward yes.”
His group came out against the Palesky tax cap in 2004, and then proposed an alternative plan that was adopted, in part, by Gov. John Baldacci’s administration under what has become known as LD1.
“The biggest problem I had with LD1 is I don’t think it had the teeth needed,” he said.
“There is tremendous dissatisfaction with what appears to be inaction,” in terms of fixing the state’s tax problems. “The status quo is not the answer.”
Connors is trying to get the two sides in the TABOR debate to come up with a list of amendments to the referendum or an alternative action plan because he is unhappy with the choices he has right now. He would like those options discussed between now and Election Day to lay groundwork for the next Legislature, if TABOR passes or even if it doesn’t.
TABOR would cap spending at all levels of government and require a two-thirds vote of the Legislature or local governing body and a majority vote on the ballot to override the limits or raise any taxes or fees, even ones for budgets that fall in the spending limit.
It would allow spending at the state level to increase at the rate of inflation plus population growth, but at the municipal level it would be capped at population growth plus inflation or the change in assessed value, whichever is lower.
While it was modeled after a law in Colorado, Maine’s proposal differs in 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.
“It’s being presented as yes or no, up or down. I’m struggling with that because it’s not a yes or no, it’s a yes or no, but…” Connors said.
Connors has asked Bill Becker of the Maine Heritage Policy Center, which drafted the proposed law, if he would be willing to accept some “friendly amendments” on the floor of the Legislature should the referendum pass. Those amendments include assurances that TABOR would not require municipalities to cut their budgets, but rather only cap spending increases or flat fund.
He also has asked Citizens United to Protect our Public Safety, Schools and Communities, which opposes TABOR, if it has alternatives “that meet the need for change in Maine’s fiscal and tax policies.”
“LD1 gets trotted out,” as an alternative, Connors said, but it’s not enough.
Under that bill, passed with bipartisan support, the state is increasing aid to education with the goal of cutting local property taxes, but there is no provision requiring property tax relief – something the chamber had wanted.
Larry Benoit, a spokesperson for Citizens United, said his group is a political action committee that exists to defeat TABOR and will disband after the November election. It is not its role to lobby on tax issues before the Legislature, although members of the organization can and will, he said. Two major players are the Maine Municipal Association and Maine Education Association.
“Certainly there’s a lot of frustration with taxes and with government expenditures. We certainly acknowledge that, but TABOR is clearly not the answer,” he said. The proposal contains “fatal flaws” that could be “extremely detrimental to the state in terms of economic development and education,” to name just a few areas, Benoit said.
The Maine Heritage Policy Center predictably had a different take on the situation.
“The chamber is finding itself in a position where the Maine economy is struggling mightily and they want to be part of the solution,” said Becker of the group’s willingness to consider TABOR. “You can’t continue losing young people, business and jobs…The current path is unsustainable.”
Becker said he is happy to support an amendment that says TABOR won’t cut municipal budgets, because he claims that’s what it says already.
“It has been our contention for two plus years that it does not force cuts,” he said, but only requires flat funding if the growth limits go negative.
As for Connors’ request to get rid of the provision that all tax and fee hikes have to be approved by the governing body and go out for a ballot vote, regardless of whether the budget is within the spending cap, Becker said he couldn’t support that change.
“That would change the general intent of the law,” he said. “The point of the Taxpayers Bill of Rights is to get at Maine’s highest-in-the-nation tax burden. If government wants to raise taxes or fees, it should take a two-thirds vote of the legislative body and majority approval of voters.”
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