Shortfall vs. surplus

The Feb. 14-15 Bangor Daily News contained an Op-ed piece by Portland Mayor George Campbell Jr., president of the Maine Municipal Association, concerning property tax relief. Since my property tax mil rate is 22.20 and rising rapidly, I was interested.

With this proposed program, the property owner pays fewer taxes to the town or city (local government). Interestingly, the commentary never does make a direct statement as to how the local governments are to recoup for their loss in property taxes. However, Campbell covers the subject when he suggests the shortfall be covered by the current state surplus.

This is the first surplus the state has enjoyed in many years. Campbell mentions that the MMA “has recommended the homestead exemption for Maine property taxpayers for the past several years.”

The MMA publishes the Maine Townsman and the March 1997 issue devotes 25 pages to property-tax exemption. It also states this exemption is to be revenue neutral. In this case, revenue neutral means the state must have some means of being reimbursed for the money it has to send to local governments in order to make up for their loss in property taxes. In the present case, this is the surplus but what happens when there is no surplus?

The MMA’s solution is a “sales tax base expansion.” Essentially, this is an expansion of our current 6 percent sales tax to include a tax on “services.” The Maine Townsman contains a full page of “taxable services.” For example, the tax would apply to your haircut, car oil changes, the guy who plows your driveway. This sales-tax expansion would be a cash cow our legislators could use to milk Maine taxpayers for unlimited amounts of money. John Curtis Thomaston