Tax cap, again

Fresh off charges of what a former Maine secretary of state called “massive, obvious and blatant” fraud, a tax-cap group has again submitted signatures that would largely prevent municipalities from raising property taxes more than 1 percent a year. If this latest drive proves above board, voters can forget about the legal questions surrounding the group and focus on the reasons that make the cap a poor idea.

Tax activist Carol Palesky of the Maine Taxpayers Action Network announced last week that she has delivered enough signatures to the state to force a referendum that would limit the amount of revenue a municipality could collect to 1 percent of its 1994-95 assessed property value. The valuation could be increased up to 2 percent a year if inflation is at least that much. The group’s previous attempts to get the measure on the ballot were stopped by former Secretary of State William Diamond, who said the group had altered petition signatures and had also illegally used paid signature collectors.

The current secretary, Dan Gwadosky, will check on the 62,000 signatures submitted by the tax group, which needs to have 51,131 approved to put the cap on the ballot. If passed, the cap is expected to cut property taxes by 20 percent to 30 percent, pleasant news for a taxpayer but horrible for towns trying to balance a budget or school departments trying to get by on a state funding formula that short-changes them annually.

Property taxes in Maine are too high, making up some 45 percent of the mix of income, sales and property taxes. The cap would quickly force the state to deal with this imbalance. But instead of addressing it in a calm, deliberative manner, lawmakers would be responding to crisis, as schools statewide ran out of funds to pay teachers or oil bills. That’s a way to get action — the sort of action residents probably would live to regret.

Any local-control advocates out there? Local budgets in Maine historically have been set locally. The tax cap would change that. Want to put up some extra local money to get a large federal matching grant? Want to chip in tax dollars for a special program at school? Forget it, the cap says, that’s not allowed. As the statewide cap changes spending patterns, it also would dictate local policy: towns and cities would make difficult choices about what to keep and what to cut not based on what its residents were willing to pay for, but based on a state referendum.

Thousands of Maine residents in hundreds of municipalities every year go through their local budgets line by line, looking to keep any tax increases to a bare minimum. They work hard and conscientiously, trying to balance local needs with the local ability to pay. The tax cap says ignore all that: let a statewide referendum determine how much you will pay. That can’t be in a town’s best interests.