Prospects dim for early vote on tax cap

AUGUSTA – Despite the persistent efforts of Senate Democrats, prospects for a June vote on a tax cap initiative appeared to be fading Thursday as more questions were raised over the underlying purpose of the early vote and over absentee ballot deadlines.

Senate Majority Leader Sharon Treat, D-Farmingdale, said Thursday some Senate Democrats would like to advance a plan for a penny increase in the sales tax as a competing ballot question to the proposed tax cap. The Senate Democrats’ bid to boost state revenues in order to help fund property tax relief proposals is viewed as overly complicated and contradictory by some opponents.

The Maine Secretary of State’s Office also has expressed concerns that an early vote on the tax cap plan could impede the state’s ability to provide absentee ballots in a timely manner to soldiers stationed overseas.

Advanced by tax activist Carol Palesky of Topsham, the ballot question caps property taxes at $10 per $1,000 of assessed value, based on values in 1996-97. The proposal would further restrict assessment increases to 2 percent a year as long as the property remains in the same family.

The citizen initiative, which municipal and education officials claim would deplete local tax revenues by 50 percent, is scheduled to appear on the November ballot unless the Legislature takes action to schedule a vote sooner. On April 16, the Maine Senate divided 18-17 along partisan lines with Democrats in the majority on a joint order scheduling the tax cap vote for the June 15 primary ballot. The House, which is also led by Democrats, responded by postponing action on the order and placing the proposal at the end of its calendar under unfinished business. Representatives could take up the order as soon as Tuesday when lawmakers return from a weeklong spring break or they could defer action entirely.

One Democratic source said Thursday the proposal reveals deep divisions between House and Senate Democrats on the issue of tax relief, which has spawned numerous legislative proposals this year. None of the suggested plans has been able as yet to attract a consensus. Eager to provide additional funds for education, property tax relief, health care programs and other legislative proposals, Senate Democrats have been unable to sell Gov. John Baldacci on their plan to raise the state sales tax from five cents to six cents in order to produce a little more than $120 million in new revenue.

Baldacci has adamantly insisted that a hike in the sales tax would enhance Maine’s already prominent reputation as a high-tax state. In addition to philosophical differences with Senate Democrats over tax policy, some House Democrats hoping to return to the Legislature in 2005 are not eager to sign on to a tax increase during an election year. Others opposed to Palesky’s plan maintain the best way to defeat her initiative is to hold the vote in November to allow more time to campaign against it.

Treat said that offering the sales tax increase as a competing measure to the cap is supported by many Mainers, according to recent polls in which respondents favored the extra penny providing the money was used to lower property taxes.

“It’s not really a question of raising taxes,” Treat said. “It’s a question of reducing the level of tax at the local level by putting more money into education and decreasing the burden on local property tax. The second part would put money directly into taxpayers’ pockets by expanding the homestead exemption [for homeowners] and circuit-breaker programs [for renters and low-income Mainers].”

Sen. Paul Davis, R-Sangerville, said the Democratic plan reflected the party’s disconnection with the majority of Maine voters who, he said, probably would not waste much time choosing between a plan that would raise taxes and another that would slash them.

“What on earth would you expect them to do?” Davis said. “Does that make any sense? If that’s [the Democrats’] thinking, it sounds pretty illogical to me. Why would anyone vote to raise their taxes to produce money that would be redirected to tax relief programs when they could get tax relief simply by cutting their property taxes under the tax cap?”