Baldacci faces tax cap test Governor’s tenure at ‘critical juncture’

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AUGUSTA – Skepticism is mounting over the governor’s ability to lead an effective coalition that can defeat this fall’s vote on a revolutionary property tax cap proposal.

Although he enjoyed early policy successes, Gov. John E. Baldacci’s job approval rating has fallen at midterm. The Democratic chief executive wound up on the losing side of several statewide ballot questions and has also failed to unite a Legislature controlled by his own party on key policy issues.

Despite those setbacks, the governor insisted this week he has the leadership ability to “galvanize” opposition to the Nov. 2 vote on the tax cap plan advanced by the Maine Taxpayers Action Network.

The citizen initiative, which would limit property taxes to $10 per $1,000 of valuation, would transform current tax collection formulas. Maine’s town and city managers claim local revenues would be cut in half under the plan.

Baldacci remained unfazed by doubts over his administration’s perceived limitations to inspire major policy changes and deliver votes at the ballot box.

“Sometimes in governing, you’re going to make some unpopular decisions,” he said. “I’m readily admitting that I’ve made decisions that aren’t politically motivated. I’ll take whatever comes my way, but frankly, some people have their own agendas.”

Baldacci’s dedication to preserving the state’s paper companies has been recognized in regions that are economically dependent on the natural resource-based industries.

But surveyors of public opinion agree those victories are less tangible to the majority of voters living in southern Maine where the economy is more vibrant and diverse.

Even the governor’s efforts to revitalize the former Eastern Fine Paper Co. in Brewer have been punctuated by local resistance from city officials who would like to also consider uses beyond papermaking for the facility they now own.

Critics point to other indicators that Baldacci is out-of-step with Mainers, including his persistence in advocating for the construction of a liquefied natural gas terminal along the Maine coast.

While the governor champions energy diversity and economic spin-offs from the proposal, voters in coastal communities eyed as potential construction sites have rejected the plan as dangerous, unsightly and injurious to local fisheries.

On Tuesday – for the second time in seven months – Mainers rejected Baldacci’s arguments against a plan requiring the state to ante up nearly $250 million to assume 55 percent of local education costs.

Last November, the governor campaigned against a proposal that would allow slot machines at a harness racing track in his hometown of Bangor. The majority of voters in Bangor and across the state favored the plan at the polls as a means to re-energize the harness racing industry and stimulate local economic activity.

During that same election, Baldacci opposed a casino operated by the state’s two Indian tribes and the question failed. Dennis Bailey, president of the Portland-based Savvy Inc. that managed the anti-casino campaign, said the governor’s support was helpful, but not necessarily pivotal to achieving victory for opponents.

The governor chalked up major accomplishments during last year’s legislative session by instituting $1.2 billion in budget cuts without raising taxes, creating the Dirigo health care plan, and laying much of the groundwork for reforming the Maine Workers’ Compensation Board.

But this year’s session has been perceived as less-than-successful by lawmakers and political observers. Many claim Baldacci’s failure to lead the Democratically controlled Legislature on the key issue of tax reform resulted in Tuesday’s approval of the Question 1 school funding measure – and his decline in the polls.

MaryEllen FitzGerald, of the Critical Insights polling group in Portland, said a survey she had taken within the last three weeks indicated Baldacci’s popularity had plummeted in a year by 18 points to 54 percent.

“He has lost a lot of the exuberance that followed him into office,” FitzGerald said. “About a third of the voters we tracked had neither a favorable, nor unfavorable perception of him – and that’s a big number on top of the huge drop. This governor is at a critical juncture in terms of public opinion.”

“He had it all,” agreed House Republican leader Joe Bruno of Raymond. “He went from uniting both parties in the first year to calling names and assigning blame in the second year. He hasn’t had a presence with the Legislature and that’s partly a staffing problem. He has not surrounded himself with people who know how to work the Legislature.”

Special session urged

Only five months remain until the November election, but Mainers are historically unreceptive to political or public policy discussions during the summer months. Most campaigns do not intensify until after Labor Day.

Baldacci met briefly Thursday with Question 1 proponents who he said will be major players in the coalition to defeat the tax cap championed by Topsham tax activist Carol Palesky.

Part of the strategy, the governor said, will be to establish before the November vote a framework for implementing the provisions of Question 1 and possible ways to pay for the state’s increased share of local education.

He does not plan to call a special session to solidify a legislative position on the tax cap. Instead, Baldacci will take up Question 1 when the next Legislature convenes in January – a decision that was challenged by Rep. Hannah Pingree, D-North Haven; by Bruno; and by Patrick Murphy, a Portland Democrat who operates the Strategic Marketing Services polling firm.

“I think the Legislature (or the governor) should call for a special session and really try to develop a tax relief/tax reform package,” Murphy said. “If they don’t, the people are still going to say the Legislature is doing nothing and they’ll send them all a message by voting for the tax cap and (placing) a pox on all their houses.”

“The governor hasn’t been a leader and he hasn’t stepped out front for tax reform,” Bruno said. “He needs to call a special session now if he wants to defeat Palesky. If he doesn’t, Palesky passes.”

Pingree had “serious concerns over whether people can get their act together” in order to defeat Palesky in November. Baldacci did not play an active role, she said, in promoting negotiations for legislative agreement on tax reform when he had ample opportunity to do so.

“And that was a big problem,” said Pingree, a member of the Appropriations Committee. “Statements from the governor’s office will not convince the public to defeat Palesky. I’m in the camp who wants to come back this summer (in special session) because people believe we failed to act on tax reform. We’re losing a big opportunity.”

Still, a special session would not be without its pitfalls. At adjournment, partisan strife was at its highest point in 10 years, with minority Republicans simmering over the enactment of a majority budget. Days before the session ended, several GOP lawmakers filed suit in court against Democratic leaders claiming they were being denied extra special session pay they had rightfully earned.

With control of the Senate up for grabs and Republicans anticipating an increase in their numbers in the House, administration officials fear a special session before the November election would ignite a political Armageddon with taxpayers footing the costs of the pre-election spectacle.

Finding an alternative to the tax cap proposal also might require difficult political decisions that could pose problems for many special session lawmakers facing re-election. Political advisers like Bailey believe any attempt to confront Palesky will have to be funded by a tax hike.

“Nobody in the Legislature wants to run for re-election saying ‘we’ve got something better than Palesky – a tax increase,'” Bailey said.

Baldacci and the work of government

Baldacci’s supporters maintain that even though events of the last year pushed his favorability rating down, he is far from out.

Christian Potholm, a Bowdoin College political science professor and a Republican, runs the Potholm Group polling service and recently charted Baldacci’s voter popularity at 60 percent.

“That’s quite high for a sitting, activist governor,” Potholm said. “I don’t think that Question 1 was a repudiation of the governor since less than 20 percent of the people voted. I would give any governor high marks for fighting for the things that he cares about whether or not they’re popular at the time. The Palesky thing is going to be a tough battle (for Baldacci), but I think it can be won.”

Kit St. John, director of the Center For Economic Policy, said voters who are inclined to discount Baldacci’s performance as governor do not fully appreciate the complexities of the chief executive’s role in overseeing state government and implementing tax policy.

“Frankly, there’s a lot of completely unrealistic expectations of what state government can do,” St. John said. “Voters are busy. They’re busy raising their kids. They’re busy going to work. They’re doing their stuff. Government gets into a level of complexity that voters don’t have time for. Voters don’t pay very close attention to the work of government.”

Rather than magnifying the blips of failure in the Baldacci administration, St. John said voters should not lose sight of the fact that the governor erased a $1.2 billion deficit without raising taxes.

“That was a remarkable accomplishment along with the Dirigo health program,” he said. “While other states were cutting Medicaid budgets and reducing eligibility for healthcare, Maine was a shining example among other states and that’s directly the result of Baldacci’s leadership.”

On opposing sides during the Question 1 campaign, Michael Starn, of the Maine Municipal Association, and Baldacci are now allies in their quest to vanquish the tax cap. Starn said the MMA welcomes the governor’s support, which he said would be key to defeating the initiative in November.

“We’d rather have him on our side than against us,” Starn said. “I think Question 1 would have won by a larger margin had his ads not come out.”

Lee Umphrey, Baldacci’s director of communications, pledged that the administration would meet its goals for tax reform and the defeat of the tax cap initiative despite the doubts offered by political observers. And, for the moment, the strategies for success do not include a special session.

“The governor is not driven by polls or political advice,” Umphrey said. “He’s driven by doing what’s in the best interest of people. His decision not to call a special session until legislators can work together still stands. Unless he thinks it’s in the collective best interest, he won’t be calling them back.”