AUGUSTA – Members of the Legislature’s Taxation Committee killed another new tax bill Monday as part of a coordinated strategy to implement its own sweeping tax reform proposal.

Sen. Stephen S. Stanley, D-Medway, said LD 209, which would have added 25 cents to the price of all tobacco products sold statewide, was unanimously rejected by the 13-member panel.

Stanley, the committee’s Senate chairman, said he would like to see committee members craft their own tax reform proposal during the Legislature’s first regular session, which is scheduled to conclude June 18.

With lawmakers facing uncertain state revenue collections, the challenge of balancing a $5.3 billion two-year state budget and action on more than 1,800 bills, Stanley said he also knows it’s conceivable his committee’s best efforts at tax reform could be deferred until the Legislature reconvenes in 2004 for its second regular session.

“That’s why I’m not saying we’re going to do it this year,” Stanley said. “We’d like to be able to do it this session. We’re working through more than 200 tax bills and, hopefully, we’ll be able to come up with something that we can live with and that will be good for the taxpayers.”

Stanley’s committee members are getting plenty of advice.

Last week, former House Speaker Michael V. Saxl released a draft report of his advisory committee’s recommendations for tax reform.

Citing among other factors the state’s over reliance on property taxes and the narrowness of its sales tax applications, the committee would like to devise a new statewide tax system. It would be crafted to reduce volatility, improve tax equity, lower the tax burden, find savings through efficiency and balance the mix of state and local tax revenues.

The possible solutions offered by Saxl’s committee include income-targeted tax credits to reduce local property taxes, eliminating tax reimbursement under the business-and-equipment rebate program and increasing the personal exemption on the state income tax.

A referendum question guided by the Maine Municipal Association to increase local education funding by broadening the sales tax also is poised to appear on the ballot this fall. The proposal is apt to increase pressure on lawmakers to consider taxing goods and services that have historically been exempt from taxation. A recent study by The Associated Press said the total of such exemptions – including taxes on food, medical and other professional services and entertainment – could surpass $2.2 billion annually.

Choosing the best means to achieve tax reform is likely to divide lawmakers who favor competing approaches. Stanley, who shares the same fiscal conservative ideals as his state Senate predecessor, 2nd District Congressman Michael Michaud, would like to think comprehensive reform could be a few bureaucratic tweaks away.

“Maybe we don’t have to increase the tax base at all,” he said. “Maybe we could just do a few little common-sense things. The governor is focusing on consolidation in areas like school management. If you start examining what can be gained from that on a large scale, the tax base might not need to be expanded.”

In addition, Gov. John E. Baldacci has vowed to veto any new tax proposal lacking two-thirds supermajority support in the House and Senate. He also wants any new tax reform plan to be revenue neutral – one that would offset property taxes in proportion to the revenue raised by any new tax.

Those prospects have prompted Stanley’s Taxation Committee to kill off bills carrying new or increased tax applications. Even though the measures are rejected individually, Stanley said the committee is keeping tabs on the amounts of revenue each proposal would produce for consideration later.

“We’re telling people that if they have a good idea, keep it in the back of their minds and save it for our tax reform piece,” he said.

Rep. Edward J. Suslovic, a Portland Democrat and Taxation Committee member, wound up voting against his own tobacco tax bill, as well as one of his other bills that would have increased taxes on alcoholic beverages. He remained hopeful Monday that both plans would eventually be resurrected.

“Because the governor has said he won’t sign anything unless it is revenue neutral, it makes me optimistic that my concepts will do well,” Suslovic said. “If we’re going to provide relief on income and property taxes, we’ve got to find revenue from other sources.”