Tax-cap proposal OK’d for vote

AUGUSTA – A seven-year struggle by the Maine Taxpayers Action Network to place a statewide proposal on a property-tax cap before the voters ended successfully Monday when Secretary of State Dan A. Gwadosky ruled proponents had gathered enough valid signatures to put the proposal on the ballot.

“The petitions have been reviewed carefully and thoroughly,” Gwadosky said. “The proposal has enough valid signatures to move forward in the process.”

Carol Palesky, president of MTAN, said her third effort to deliver a citizens’ initiative to Maine people couldn’t have arrived at a more fortuitous moment.

“We were always a little bit ahead of our time on this issue, but I could always see it coming,” Palesky said Monday. “What’s so wonderful about our referendum is that it not only helps individuals, it also helps businesses. Everyone would get equal tax relief.”

Modeled after California’s Proposition 13, the MTAN plan would cap property taxes at 1 percent of assessed valuation, or $10 per $1,000 of valuation. If approved by the voters, the initiative also would roll back the base value of properties to their 1996-97 assessed value. For property constructed, sold or transferred after the 1996-97 assessment, the base value would be the appraised value at the time of construction or acquisition.

The initiative permits a property’s base value to then be adjusted up or down each year by a maximum of 2 percent. Certain exemptions, including transfers between spouses and transfers between a parent and child, are included in the proposal. The measure also would prohibit any change in the maximum property-tax rate not supported by a two-thirds vote of all voters in a statewide referendum. Localities could impose special taxes, excluding those on property, but only with the support of two-thirds of the voters in a municipality.

Voters are already scheduled to deal with property-tax relief this year as the result of a citizens’ initiative carried over from the November elections. Citizens to Reduce Local Property Taxes Statewide, the promoters of Question 1A, shared the ballot at that time with two other competing options. Question 1A received the most votes, but since it didn’t get more than 50 percent, it will appear again unopposed on the ballot during the June 8 primaries.

That proposal, supported by the Maine Municipal Association, would require the state to pay 55 percent of funding for public education from kindergarten to 12th grade. Lawmakers and the governor opposed it and submitted a competing measure because they feared 1A would cost the state too much if enacted all at once.

Last month, lawmakers, the governor and 1A proponents broke off talks aimed at resolving their differences and identifying an alternative tax-relief compromise that could be passed by the Legislature. But legislative leaders said Monday the tax-relief issue was still very much alive and that Palesky’s proposal could actually accelerate agreement among their competing factions.

Criticized by many legislators, educators and municipal officials, the tax-cap plan has been described as a “devastating” answer to tax reform by opponents such as Geoff Herman of the Maine Municipal Association. The initiative would drastically reduce the amount of tax revenue available to municipalities and school departments – a consequence Palesky described as appropriate and desirable from the perspective of overtaxed Mainers.

Maine House Republican Leader Joe Bruno of Raymond said he was no fan of the tax cap, but added that he understood that voters have become increasingly impatient with what he described as the Democratically controlled Legislature’s inability to ease the property tax burden in Maine.

“Hopefully this will provide a sense of urgency to come out with some true bipartisan tax reform this session,” Bruno said.

The timing of the vote on the tax cap remained a subject of some speculation Monday. Even Gwadosky would only commit to an election on the issue “no later than November.” Constitutional language regarding citizens’ initiatives are currently being interpreted differently by legislative leaders and the tax-cap proponents. One provision of the Constitution maintains the Legislature may order a special election “on any measure” subject to the will of the people. A later passage requires the governor to set the election in November.

Deputy Secretary of State Julie Flynn, Maine Senate President Beverly Daggett and House Speaker Pat Colwell insisted Monday that the Legislature has the power to schedule the tax-cap vote in June to appear on the same ballot as Question 1A. Palesky and the MMA disputed that interpretation and said the question was clearly intended to be on the November ballot. The dispute could ultimately wind up before the Maine Supreme Judicial Court for a ruling, although whether a June or November vote would favor one question or the other remained a matter of conjecture.

Gwadosky said 50,519 valid signatures were required to qualify for ballot status and that MTAN had submitted 51,255 valid signatures, or 736 signatures more than was required. The petitioners had originally submitted 64,401 signatures, 13,146 of which were disqualified by Gwadosky’s office.

Of the invalidated signatures, 8,353 could not be certified as belonging to a registered voter in their municipality. Another 2,825 were invalidated because they were duplicates of signatures already counted and 1,367 were disqualified because the circulator’s oath was not complete on the petition. The rest were rejected for a variety of minor violations.

Palesky, an accountant from Topsham, was convicted of forgery in 1997 for altering petitions to make invalid signatures appear valid in an earlier tax-relief campaign. She served nine months in jail for the crime and has maintained a simmering relationship with Gwadosky ever since, frequently referring to the Fairfield Democrat as “the evildoer in Augusta.”

She brushed aside any suggestion that her felony conviction and jail stint might compromise her credibility as a high-profile proponent for the tax cap.

“People are ready for tax relief now – and they don’t care where it comes from,” she said.

More information on the MTAN tax cap proposal can be obtained on the Internet at http://www.maine.gov/sos/cec/elec/pets02/leg4.htm.