B on Question 1

1A Citizen Initiative: Do you want the state to pay 55 percent of the cost of public education, which includes all special education costs, for the purpose of shifting costs from the property tax to state resources?

1B Competing Measure: Do you want to lower property taxes and avoid the need for a significant increase in state taxes by phasing in a 55 percent state contribution to the cost of public education and by providing expanded property tax relief?

1C against A and B: Against both the Citizen Initiative and the Competing Measure.

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Questions 1A and B force property-tax relief and, one way or another, tax reform on a Legislature that proved incapable of acting for itself. Forget the hype about whether the money is guaranteed to go to taxpayers. Either would provide small but significant breaks. What size break specifically and what else these questions do, however, is more complicated.

First, the easy part: Choosing 1C is a mistake for two reasons. It tells lawmakers that tax reform isn’t all that important to Maine, when the state’s system is badly in need of reform. And it encourages various organizations with some truly bad ideas about taxes and who want the two other options to fail so theirs will have a chance. This is no time to let legislators off the hook and no time to start reform from scratch.

The citizen’s initiative, 1A, is a reflection of the work the Legislature attempted and failed to complete over the past couple of years. It was picked up by the Maine Municipal Association, which in turn got a record number of signatures for their initiative, indicating how seriously Maine needs tax reform. Had lawmakers been more serious last year, they could have passed a version of 1A, modifying its funding schedule and emphasizing its plan to lower the state’s tax burden. But they didn’t, and now with the governor and lawmakers set against expanding sales taxes to pay for the property-tax break, to pass 1A would be to assure that valuable state programs were cut and budgetary sleight of hand took place to create the needed $245 million in annual funding. Question 1A also places 100 percent of special-education funding on the state while leaving its administration at the local level, a natural equation for conflict and an incentive for school districts to over diagnose.

The response to 1A, Question 1B, is a better plan now in part because it is more specific. It sets a five-year course toward increasing the state’s share of education to 55 percent and more than doubled funding for the state’s circuit-breaker program, which targets immediate property-tax relief to low-income residents. It defines school funding through the new Essential Programs and Services model, which promises a fairer system of funding and expects all towns to make a serious contribution if they are to receive state aid. In the eastern and northern half of Maine, almost all communities have been making those contributions for years but have not been properly supported by Augusta.

Unlike 1A, 1B has political will behind it. This shouldn’t be underestimated. The governor created it, lawmakers modified it and dozens of influential organizations have lined up behind it, groups such as the Maine State Board of Education, the Maine Merchants Association, the Maine Children’s Alliance and the Maine State Chamber of Commerce. Many lawmakers wouldn’t mind seeing 1A fail; their reputations are at stake with 1B, and their reputations will be tested in the final years of 1B’s five-year phase-in as the amount going to schools increases dramatically.

Question 1B, like 1A, does not directly address tax reform but it leads in that direction, which is better than what the other two questions provide. Gov. Baldacci has inherited a sales-tax system that suffers from an exuberance of special-interest breaks and remains stuck in a 1950s view of the economy; the state’s income tax rising too steeply too quickly, placing middle-class residents at the top of the scale. Question 1B gives lawmakers incentive to find fair solutions to these problems and it gives them a couple of years to find them.

Maine’s tax system has been failing over the last couple of decades; Question 1B sensibly takes the next couple of years to bring part of it back to health.