Voting no on Question 1

On June 8, Maine voters will be asked to vote again on a question 62 percent of us rejected last November. Question 1 asks, “Do you want the State to pay 55% of the cost of public education, which includes all special education costs, for the purpose of shifting costs from the property tax to state resources?”

The Maine Municipal Association initiated this question in response to increasing concern about the steep rise in property taxes, especially within coastal communities and those with valuable inland waterfront property. However, instead of examining how school funding relates to all other government spending and the fairness of the existing property tax burden among all taxes levied, the MMA question focuses on one important but narrow concern, the failure of the state to pay 55 percent of the cost of K-12 public education by the beginning of the next fiscal year, July 1, 2004.

Question 1 assumes that increased state funding for K-12 education will trigger automatic reductions in local property taxes. But nothing in question 1 requires municipalities to reduce the mill rate. Municipalities could choose to spend the freed money formerly spent on education for other purposes. They could also decide to spend more on education, therefore negating some or all of the increased funding from the state.

While local property taxes and mill rates have sharply increased in some communities, taxpayers’ ability to pay these increases varies widely. Most Mainers would agree low-income and working-class families who are property-rich but income-poor should not be forced from their homes. The limited money we have available for tax relief should be targeted to these individuals and families to allow them to keep their homes. Question 1 increases state funding for education but it fails to address those taxpayers experiencing genuine hardship paying their property taxes.

To achieve tax fairness, Maine policy should direct tax relief to people who are paying a disproportionately high percentage of their income in property taxes. MPA and the Taxpayers for a Fair Budget coalition supported an initiative this past session known as Homestead Plus that would ensure no one paid more than 5 percent of their income in property tax. For those households eligible for the Circuit Breaker program, the percentage would have been limited to 4 percent. We believe targeting tax relief is a better approach than an across the board spending increase that jeopardizes funding for other critical state programs.

As originally written, MMA expected Question 1 to pass last fall, giving the Maine Legislature all this past legislative session to devise a way to fund the $260 million initiative mandate Question 1 creates. The legislation calls for the Taxation Committee to report out a revenue neutral measure by March 1, 2004 to generate the $260 million estimated that would be needed to fund the 55 percent state funding level. March 1 came and went several months ago. Remember, an initiative question cannot be changed once it is certified by the secretary of state for consideration by the voters.

Should Question 1 pass on June 8, the Maine constitution states it cannot take effect until 45 days after the succeeding regular session. That means the summer of 2005. Yet the Maine Legislature passed legislation last month that commits it to reach the 55 percent state funding level for education in five years. State budget analysts predict that Maine faces a potential budget shortfall of $750 million to $1 billion in the next biennial budget that begins July 1, 2005. How can the Maine Legislature meet that budget gap and simultaneously add $260 million in additional spending for K-12 education without devastating cuts to other budget areas Mainers no doubt care deeply about, including health care provided through MaineCare, Maine’s fledgling Dirigo Health program, higher education, or funding for environmental protection?

While many descriptions of the recently concluded legislative session cite the failure to address education funding and property tax relief, that characterization is not completely true. An Act To Reduce the Cost of Local Government through Increased State Education Funding and Provide Property Tax Relief, Public Law Chapter 712, requires the Maine Legislature to achieve the 55 percent state funding level for local education in five years. This phased-in approach to boosting state funding for education is far more realistic than the immediate increase required by Question 1.

During the final days of the legislative session, the MMA supported a legislative resolution in which the parties agreed to achieve the 55 percent funding level over four years. Geoff Herman of the MMA is quoted in the Bangor Daily News May 13 stating, “We compromised on that a long time ago and we’re sticking with it.”

With the MMA acknowledging that immediately funding the state share of education at 55 percent is unrealistic, why pass Question 1? The MMA has made its point about property tax relief and school funding. Let’s not harm other critical state programs to allow MMA to make a political point. Vote no on Question 1.

John Dieffenbacher-Krall is co-director of the Maine People’s Alliance, a statewide citizen action organization comprised of 22,000 members dedicated to strengthening our democracy and advancing economic, environmental, political, and social justice.