No Relief Yet

With a complicated tax-relief plan of his own and a lack of organization within his Democratic Party to pass an alternative, Gov. John Baldacci bade farewell to the Legislature yesterday without enacting new property tax relief, leaving the possibility stronger that one or both of two poorly made plans will pass at the voting booth. This disappointing end to an otherwise productive session of the Legislature could still be saved.

The governor and legislative leaders yesterday understandably emphasized their successes this session, and there were many. They approved a major merger of departments for mental health and human services. They established the state’s community college system, passed a new funding model for K-12 schools and created an ambitious and badly needed health care system, Dirigo. They balanced the budget despite significant shortfalls. All good and to their credit.

But Maine also needed a tax-relief plan now, not because taxes have suddenly become worse (they haven’t; they’ve dropped slightly compared with income). It is needed now because of ballot measures that would, under one to be considered in June, demand hundreds of millions more dollars in state funding for schools annually, and under a November question, cut municipal revenues nearly in half.

The June measure, advocated by the Maine Municipal Association, requires the state to immediately begin paying 55 percent of K-12 school costs, something it should have been doing well before now, and 100 percent of special education. In its first year, that would save municipalities $260 million, including $102 million from special education. That is a fiscal jolt, and its demand for 100 percent reimbursement for special education is not persuasive. Voters have heard plenty about this issue because it is its second time on the ballot and likely many people have made up their minds about it.

Whether the June question passes, Gov. Baldacci has already planned a special session starting in late August to address tax relief and a bond package, which lawmakers also couldn’t agree on this week. The session is needed but it is apparent that legislators cannot assemble a relief package they can pass. The governor, however, still can and his leadership on this issue will be crucial this summer.

It won’t take long for municipal leaders to conclude that if the November tax cap – $10 on a $1,000 in valuation – looks as if it will pass, they must make certain the extra funding from the state via the MMA bill also passes, so expect a vigorous five weeks of campaigning before that vote, but expect too that they would be pleased to work and negotiate with lawmakers to help defeat the cap.

The governor yesterday called the just-ended session the most productive in the last 40 years, and he may be right. But it is not a completed session until lawmakers make a final attempt at tax relief. The governor, successful in so many other areas this year, can lead the way.