Despite promises last fall to make tax reform one of the top priorities in Augusta, proposed reforms crumbled last week in the Legislature.
The proposal that died in committee would have raised more than $230 million by expanding the sales tax to services and amusements it doesn’t cover now, raising the meals and lodging tax from 7 to 8 percent and increasing the real estate transfer tax. That money would have been used to lower the state’s graduated income tax to a flat rate of 6 percent and double the homestead exemption. Backers of the measure claim they were just one vote short of the support they needed.
Despite promising last fall that tax reform would be the “first order of business,” Gov. John Baldacci is now promising to introduce new legislation in January.
Given what legislators and Baldacci promised prior to the election last fall and what came out of this most recent legislative session – nothing – they’ll forgive us for responding to renewed promises with a healthy dose of skepticism.
“People are being taxed out of their homes,” Sen. Phil Bartlett (D-Gorham) said in October. He said tax reform was one of his top priorities, citing some of the reforms that would have been included in the legislation that failed last week, such as the changes to the income tax brackets.
“We need to find a way to give the middle class a fair shake,” said Bartlett.
Like Bartlett, Sen. Lynn Bromley (D-South Portland) was an opponent of the Taxpayer Bill of Rights, which failed to get the support of a majority of voters last fall. Bromley argued that rather than bringing tax relief, the measure known to many as TABOR would have been an impediment to it.
“Everybody says we need tax relief, but if TABOR passes, we couldn’t do it,” said Bromley.
Rep. Peggy Pendleton (D-Scarborough) agreed that TABOR was not the answer. “I’m worried it would leave problems for future generations. I do agree we have a tax problem, there’s no doubt about that. I just don’t want to pass the problem on.”
Another member of the House, Rep. John McDonough (R-Scarborough), was a supporter of TABOR. His rhetoric was as strident as Bartlett’s.
“Property taxes are the No. 1 thing, only because you’re driving people with fixed incomes out of their homes. The tax structure needs to change,” said McDonough.
However, the most outspoken of them all, both in his bid for re-election and in his inauguration speech, was Baldacci, who said, as he was running for re-election, “that has to be the first order of business, to finish the work people are demanding on property tax relief.”
In his inauguration speech, he said that as the state reached its goal of funding 55 percent of the cost of education, legislation would require that it be passed on to taxpayers. “If it’s not guaranteed, I’m going to veto the legislation,” he said.
This session, the Legislature didn’t get any closer to its goal of funding 55 percent of the cost of education or to its goal of tax reform. So, for now, spare us the rhetoric, and we’ll stop holding our breath.
Brendan Moran, editor
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