Court rules on tax cap

AUGUSTA – Adding to a puzzle perplexing state lawmakers, a bare majority of the Maine Supreme Judicial Court said Friday in an advisory opinion that at least part of a controversial property tax cap slated to go before state voters would be unlawful.

Four of the court’s seven justices, responding to a formal inquiry from the Legislature, concluded that the initiative’s provisions for establishing the value of property would violate the Maine Constitution.

The initiative championed by anti-tax advocate Carol Palesky would cap property taxes at $10 per $1,000 of assessed value, based on values in 1996-97. It also would limit assessment increases to 2 percent a year while the property’s ownership remains in a family.

The court majority said it appeared that the initiative would run afoul of a constitutional provision requiring property taxes to be based on fair market value.

The four justices said, “The bill provides for disparate treatment of property based not on the property’s value but on the date of acquisition by the property’s current owner.”

One category would include property acquired by its current owner before the 1996-97 assessment; the other would include property acquired after that assessment.

In detailing its finding of a constitutional flaw, the court majority cited Article IX, Section 8 of the Constitution of Maine, “which requires taxes on real and personal property to be assessed and apportioned equally and according to just value.”

The court majority went on to say, however, that other elements of the pending initiative might stand on their own, even if the so-called rollback provision were eliminated.

Forming the majority were Chief Justice Leigh Saufley and Justices Howard Dana, Susan Calkins and Jon Levy.

Three other members of the court – Justices Robert Clifford, Paul Rudman and Donald Alexander – dissented, writing that the matter was not timely.

“Because the proposed law is yet to be voted on by the people, there is no matter of “live gravity’ and no question of sufficient immediacy and seriousness to create a solemn occasion justifying our answer,” the court minority said.

Palesky agreed that it was premature for the court to take up the issue and said the advisory opinion would not affect her plans to take the initiative campaign before the voters.

“We’re going to go ahead,” Palesky said. “This is going to be on the ballot and I know it’s going to pass because people across the state are outraged at their property taxes.”

Palesky defended the tax cap’s constitutionality, saying its wording was based on a California measure that passed muster with the U.S. Supreme Court. She added that the relevant wording of the Maine and California constitutions is similar.

The Maine Senate and House of Representatives posed its question to the justices in a communication dated March 29.

With lawmakers still embroiled in a wide-ranging debate over how to respond to the so-called Palesky tax cap and another pending ballot question to boost local aid to schools, the law court response had been avidly anticipated and a Taxation Committee work session was put off Friday afternoon when word that a court answer was expected began to circulate.

Divided Democrats in the House and Senate along with Baldacci administration officials who have been discussing various plans under a general label of tax relief consulted privately through the day.