MMA, officials debate tax relief Referendum plan draws opposition

AUGUSTA – A referendum proposal backed by the Maine Municipal Association to boost aid to local schools as a way to produce property tax relief has all but united elected state officials against it.

And with lawmakers poised to take up anew the debate over an alternative, what does the MMA want?

In the July issue of Maine Townsman, Executive Director Christopher Lockwood reiterates the group’s call for a plain public vote in November.

“The difficulties the Legislature has experienced to date in formulating a competing measure are a testament to the importance of allowing the citizens of Maine to have the opportunity to vote, up or down, on the referendum proposal,” Lockwood wrote.

“If the voters approve the referendum, it will provide the Legislature with a clear message and blueprint.”

Gov. John Baldacci, meanwhile, has been seeking to galvanize opposition to the citizen initiative while summoning lawmakers back to the capital for a special session that could produce the competing measure Lockwood warns against.

A simple, irreconcilable dispute? Not quite. History, both recent and going back a ways, demonstrates that nothing is simple about tax reform and school funding.

And so, with the two sides ostensibly locked in a confrontation over whether November ballots should include one question or two on the issue, officials of the MMA and the administration have been conferring quietly to see whether they can strike an accord that both sides could endorse.

Heading into this week, the matter remained in limbo.

“It doesn’t look like we’ll be able to reach any compromise agreement,” said MMA lobbyist Geoffrey Herman.

On the issue of the “immediacy” of substantial property tax relief, Herman said the MMA believed Baldacci’s phase-in approach toward higher school funding was “too far away” from what backers of the citizen initiative want.

The governor and his allies maintain that the MMA-backed proposal carries no guarantee that more state aid would result in curbs on local property taxes – much less the 15 percent average decrease that referendum proponents envision.

Indeed, some critics of the citizen initiative have likened its effect to a tax increase that would cost the state more than $260 million in the first year alone.

Baldacci spokesman Lee Umphrey acknowledged that there have been “conversations” between the administration and the MMA but stopped short of characterizing them as especially promising.

“The governor feels that working with MMA to come up with something that’s best for Mainers would be the best way to go,” he said.

To date, lawmakers who have agreed that an alternative to the citizen initiative is needed have failed to agree on what shape such an alternative should take.

Nothing new there, say referendum supporters.

From Lockwood’s perspective, “the referendum proposal was developed because of the Legislature’s inability over many years to address tax reform, particularly Maine’s overreliance on the local property tax.”

The notion of “overreliance” that Lockwood writes about is accepted in many quarters but still subject to debate. Lots of people inside and outside the Legislature suggest taxes of all kinds are just too high.

But the desirability of property tax relief is widely appreciated. Its advocates include Baldacci, who has advanced an evolving series of proposals aimed at heading off approval of the MMA-backed measure by phasing in a similar school funding approach.

Like the citizen initiative, the governor has proposed boosting the state’s share of local school costs. Rather than at one stroke, however, his increased state share would not peak for five years and his definition of local costs for which the state is responsible would be less expansive.

Should lawmakers agree to put out a competing measure, voting complexities would take over.

Mainers going to the polls in November would face options of approving either question or rejecting both. A majority of votes would be needed for enactment, according to state elections officials.

If neither question were to win a majority, the top finisher would go out for consideration again, provided it received support of at least one-third in November. If both proposals were to fall short of the one-third threshold in November, the issue would die, officials said.