Republicans promote plan to cap spending

AUGUSTA – More than 50 Republican lawmakers packed the grand stairway at the State House Thursday to promote their drive for an overhaul of the state’s tax policy and new curbs on state spending.

“Most years we spend two to three times more than the rate of inflation and at least twice the rate of income growth,” said House GOP leader Joe Bruno of Raymond. “Every year government takes more and more of what Maine people earn. Why? Because that’s the way it has always worked. We have to put a mechanism in place that protects Maine workers from having their paychecks eroded.”

Foremost on the Republicans’ agenda is an amendment to the Maine Constitution that would cap the growth of spending for state, county and municipal governments at the rate of inflation plus the percentage of growth in population. Bruno said that if the cap had been enacted 10 years ago, spending would be $400 million lower than it is today amounting to a 15 percent decrease in the tax burden.

“You’ll hear a lot about tax reform in the next few weeks,” he said. “Republicans believe that true tax reform starts with spending reform and then addresses the rates of taxation.”

Bruno estimated that under the Republican proposal the state would have about $46 million in revenue left over for tax relief in each of the next two fiscal years after accounting for inflation and population growth.

The GOP tax initiative received a polite reception Thursday from the governor’s office and from Democrats who hold majorities in the House and Senate. Any proposed constitutional amendment must have two-thirds backing in the Legislature, an ambitious, if not unachievable, goal for minority Republicans who harbor some bitterness over the politicking that produced a supplemental budget enacted by the Democratic majority last month.

Assuming Republicans are unable to persuade Democrats to support their tax reform proposal, they plan to take their concerns to Maine voters who they claim are looking for greater fiscal accountability at the State House. In the absence of enacting their reforms in the Legislature, the GOP lawmakers reason they will have crafted compelling arguments for the election of their candidates in the fall to gain Republican control of the Senate and make major advances in the House.

“When it comes to state spending, it can no longer be business as usual,” Bruno said. “The boom-and-bust cycles of state spending and growth have been a roller coaster ride and it’s time to get off.”

In addition to the cap on spending, Republicans are also calling for:

. A constitutional amendment that requires a two-thirds vote of the Legislature to raise taxes or fees;

. The appropriation of $20 million from any excess revenues to eliminate income taxes for Maine families earning $27,000 a year or less, along with across the board reductions in income tax rates;

. A requirement that all future legislative budgets fully fund current obligations before expanding or creating new programs;

. A revamping of property tax assessments to base tax bills on a property’s purchase price with any future increases tied only to the rate of inflation until the property is sold or transferred.

Democratic leaders have been working to devise a tax reform package of their own and disputed Republican claims that the majority party has done little to reduce state spending. Senate Majority Leader Sharon Treat, D-Farmingdale, and House Majority Leader John Richardson, D-Brunswick, argued a state spending cap is already included in the budget to limit increases to a 10-year rolling average of personal income growth. Richardson said Republicans and Democrats approved a budget last year that cut state spending by $1.2 billion.

“Plus we cut another $100 million this month,” he said. ‘So we’ve shown Maine people that we can fiscally discipline ourselves to cut spending when necessary.”

Maine’s historically high ranking as one of the most heavily taxed states in the country continues to fuel the tax reform debate and produce referendum proposals to remedy the problem. Two tax relief questions will be on the ballot this year and lawmakers are currently considering bills that would boost reimbursements under the state’s Homestead Exemption and circuit breaker programs.