Bill seeking local option on sales tax tabled

AUGUSTA – The Legislature’s Taxation Committee voted Tuesday to carry over legislation that would allow communities to impose a local sales tax.

The postponement came at the request of the bill’s supporters, who, faced with likely defeat this session, asked the committee to reconsider the proposal next year.

The legislation would allow a community – through a referendum – to tack on an added 1 percent sales tax on goods bought there, the proceeds from which would help fund regional projects.

In asking for the delay, supporters cited a need to further address concerns of the legislation’s traditional opponents – businesses and rural communities worried the local sales tax would unfairly benefit urban areas and create unfair competition between businesses in neighboring towns.

“We need to talk to these people and make sure we have a bill everyone can get behind,” Bangor City Manager Edward Barrett said Wednesday.

Bangor officials, like their urban counterparts, have been among the local tax’s most ardent supporters, touting it as a way to reduce dependence on the local property tax.

In Bangor’s case, the projected $8 million to $10 million in annual revenues from such a local sales tax would be used to fund the construction of a new Bangor auditorium.

If funded through the property tax, the $30 million project – the largest in the city’s history – would translate into an added $1.72 on the city’s relatively high tax rate of $23.45 per $1,000 in valuation.

Last year, the City Council voted to replace the 47-year-old auditorium rather than repair it, but made it clear that Bangor taxpayers would not foot the entire bill.

The council order specifically states the council will review in 2002 the progress of funding the new construction. If the funding is inadequate to build the new facilities, the city will close the auditorium and civic center by Dec. 31, 2004.