Taking the option

Countless rounds of legislative debate over the years have taught supporters of a local-option sales tax that a simple proposal to add a penny for the local coffers will never fly in Augusta. If they wanted the option to pass, they would need something in it for rural districts. Sen. Robert Murray of Bangor may have found a partial answer in L.D. 809.

The need for the tax comes through as loud and clear as the foot-stomping, cheering fans attending high school championship basketball this week at Bass Park. The auditorium serves the region and brings people to Bangor, to the delight of local merchants. But it also costs the city approximately $300,000 a year — and the additional taxes brought in by out-of-town shoppers doesn’t come close to paying for it.

Service centers like Bangor or Presque Isle or Machias or Ellworth face the dual problem of supporting large amounts of tax-exempt property — public buildings, hospitals, schools, fraternal organizations — and the inability to use any tool but the property tax to help pay for them. Local-option sales taxes, common in other parts of the country, haven’t made much progress here because of the state’s largely rural nature: only a few places would benefit directly, so the Legislature has always had plenty of members from small towns willing to kill it.

Sen. Murray’s bill recognizes this problem by reserving half the money generated by a local-option tax to reduce the county costs for all towns and cities in a county. That gives everyone a benefit and should lessen opposition. An observation by LD 809’s cosponsor, Rep. Kenneth Gagnon of Waterville, also is worth noting. He’s leaning toward having the tax option apply to regions rather than individual cities so that the tax doesn’t create “a number of mini-borders around the state.”

None of this should occur, however, in the absence of a larger examination of how Maine taxes and what it hopes to achieve through its tax policies. Like the dozens of other tax bills that are being debated in Augusta, this one too needs to be placed in the context of the state’s total tax picture. One question to ask is whether this is the best way to cover the costs of these service centers.

Nevertheless, greater regional cooperation is an idea worth pursuing to prevent making individual businesses winners or losers in a city-to-city tax competition. With enough tinkering, this modest municipal idea might actually gain support in Maine.