Question 1 factions raise more than $1 million

AUGUSTA – Massive infusions of cash from a state municipal lobbying group and the national teachers union pushed total contributions in the Nov. 4 referendum on property tax relief past the million-dollar mark Friday as the battle for Question 1 continued to escalate on television screens across the state.

Ads supporting Question 1A and Question 1B were submitted to Maine television stations so quickly Friday that one station manager said they were “just piling up” on his desk waiting to be reviewed.

Meanwhile, both sides continued to urge Maine television stations to withhold each other’s ads, alleging each contained inaccuracies and misleading information. Steve Thaxton, station manager for WCSH-TV6 in Portland, said he was well aware of the requests from the opposing factions but had taken no action as of Friday afternoon in response to any of the PAC complaints.

Although they were not available for comment Friday, representatives of the political action committee Citizens to Reduce Local Property Taxes Statewide reported raising $614,071.40 from July 6 through Sept. 30 in support of Question 1A. A little more than $460,000 was spent on advertising while $62,000 was spent on polling and issue research.

According to records submitted Friday at the Commission on Governmental Ethics and Election Practices, the Maine Municipal Association contributed $210,000 to the Question 1A PAC during the filing period, while National Education Association gave $350,000. The 1A supporters have raised $831,514.81 for the year to date and spent $812,227.41. They reported having $19,287.40 in cash on hand.

In contrast, the Question 1A PAC had almost three times as much money as both of its opponents combined. Supporters of Question 1B reported raising $292,681 in contributions with $233,822 in cash on hand. Supporters of Question 1C had raised $500 and spent nothing.

The Question 1A PAC was created in reaction to the Legislature’s unrealized 1984 intention to fund 55 percent of local education costs. Spearheaded by the Maine Municipal Association, a lobbying and consultant group for municipalities, the initiative requires the Legislature to identify funding sources to raise the state’s share of local education costs to 55 percent. The legislation urges the Legislature to achieve that goal without raising new taxes. Question 1A recommends that the Legislature fund the initiative through a “revenue neutral” strategy, leaving it up to lawmakers to define the meaning of the term “revenue neutral.”

The state currently funds about 41.4 percent of local education costs. The additional revenue needed to fund 1A is estimated by the MMA at about $264 million. State officials disagree and insist the number is closer to $246 million. Under Question 1A, the new revenue would be distributed to Maine communities effective July 1, 2004.

Supported by the Mainers For Responsible Property Tax Relief political action committee, Question 1B is a competing measure crafted by Gov. John E. Baldacci and amended in August by the Legislature. The revised proposal would phase in additional education funds over a five-year period until the 55 percent goal is reached. The plan also provides an additional $40 million through June 30, 2005, to enhance property tax relief now available under the state’s “circuit-breaker” and Homestead Exemption programs.

Question 1C, supported by the Common Sense for Maine Taxpayers PAC, allows voters to reject both the citizen initiative and the competing measure. Under state law, if neither Question 1A or 1B receives a majority of the vote, the option receiving the greatest number of ballots would be considered next June as an unopposed question as long as it received at least 33 percent of the total number of votes cast. If 1C receives enough votes to deprive 1A or 1B of at least one-third, then 1C would prevail.

Speaking for the 1B PAC, Kay Rand said Friday that she would not be surprised to see nearly $2 million spent by competing sides in the property tax debate as the campaign intensifies during the next three weeks. The 1B PAC reported expenditures of $58,859 after receiving large donations of $50,000 each from the corporate headquarters of the International Paper Co. and the Tambrands Corp., which makes Tampax and other feminine hygiene products at a plant in Auburn. National Semiconductor also contributed $35,000 to 1B, and the Sappi Paper Co. gave $25,000.

Just as teachers unions feel they have a lot to gain by supporting 1A, big corporations are backing 1B, fearing the Legislature will alter state tax laws to their disadvantage if 1A prevails. All of the large companies benefit from the state’s Business and Equipment Tax Reimbursement program, which is funded at around $60 million annually from state revenues. Rand said company executives fear lawmakers could reduce or eliminate the BETR tax break if they are forced to quickly identify a funding source for 1A.

“While we’re continuing to lose manufacturing jobs, our manufacturing sector remains productive at the same percentage of gross domestic product that it has been and it’s because of BETR,” Rand said. “It’s a huge issue for these companies.”

The next filing PAC campaign finance report deadline with the ethics board is Oct. 29.