Welcome relief

Borrowing a bookkeeping device from states which already have sustained serious declines in tax revenues, the governor and the Legislature this week restored $12.5 million in previously axed aid to public schools. It was a prudent decision on the part of state government.

Earlier in this session, reductions in various education subisidies totaling more than $30 million appeared inevitable. Gov. John McKernan and lawmakers were lobbied hard by local school and municipal representatives who felt the cuts were too severe.

After weeks of looking for alternative ways to make a similar impact on the $210 million revenue shortfall, the governor and legislators settled on an accounting technique that has helped rescue officials in Massachusetts and Vermont. The state will move up by 10 days, the date on which businesses must mail in their employee income tax withholding.

This earlier mailing should have little impact on many Maine businesses, which already must send off their federal income and Social Security withholding within three days after it is collected from employees. Maine government in the past has been generous on this issue, allowing businesses to retain employee withholding for up to 25 days after the end of the month in which taxes were collected — a grace period of 55 days. Maine business should expect this change in policy to be permanent. Government will not be able to use the device again.

The 10-day shift will pump $12.5 million into the state treasury before June 30, the end of the fiscal year. The state thus moves to this budget year some tax receipts that would have gone on the books in fiscal 1991, and adds proportionately to the headache that will await the 115th Legislature and Maine’s chief executive after the November elections.

This creative accounting exercise only delays the day of final judgment, but it defuses a potentially nasty, election-year squabble between Augusta politicians and local leaders, and it may have averted an explosive encounter between angry taxpayers, councilors and selectmen and school board officials.

Despite the repeated appearance of local tax and spending cap initiatives, which should rub the noses of state politicians in the problem of onerous property taxes in Maine municipalities, there still are people in Augusta with the ears of the powerful who believe deep, widespread unhappinesss with high property taxes to be a political illusion.

If the state hadn’t finessed this $12.5 million on the books and taken that direct burden off the backs of local people, the political illusion, in the form of a property-tax revolt, might have been knocking on the door in Augusta as early as this summer.