November 14, 2024
TAX REFORM DEBATE THE ONE PERCEN

Tax cap opposition marshals forces Chamber of Commerce yet to take sides on issue

The campaign against a proposed 1 percent property tax cap will begin in earnest next week with the unveiling of what opponents call a “rapidly gathering” coalition of detractors.

The roll out, set for Wednesday in Portland’s Fort Allen Park, will come about two weeks after the formation of a Citizens United for Maine’s Future, a political action committee opposed to the so-called Palesky plan voters will consider in November.

“For our purposes, we want to bring forward the facts and demonstrate how damaging Palesky will be to community life in Maine,” said Larry Benoit, the former Baldacci aide orchestrating the anti-tax cap campaign.

The cap’s foes include some usual suspects, such as the Maine Municipal Association and the Maine Education Association. But the coalition also will include some less predictable members, Benoit said, including the Maine Association of Realtors, a 3,800-member organization of real estate professionals one could argue would benefit from a lower taxed market.

The association’s legal counsel, Linda Gifford, said despite the seemingly contrary nature of its stance, the decision to oppose the tax cap was simple.

“Putting on such an artificial cap is a knee-jerk reaction to fixing something that some would argue isn’t broken,” Gifford said Wednesday, contending such a cap would actually dampen property sales – much like rent control – by essentially locking owners into their homes lest they give up their lower tax bill.

Topsham tax reformer Carol Palesky and her Maine Taxpayers Action Network spearheaded the referendum drive, which if successful would limit property taxes to 1 percent of 1996-1997 values and limit annual increases in value to 2 percent as long as the property stays in the family.

Palesky’s California-style tax cap has spawned a war of words between its competing factions. The sparring is expected to erupt into a costly and contentious television campaign in coming months.

For supporters, it will be a campaign about lifelong Mainers being forced from their homes by skyrocketing taxes that feed the insatiable appetite of local government. For opponents, it will be a campaign about skeletal police forces, bathtub sized potholes and aimless students deprived of after-school activities – all decimated by the disappearance of local tax dollars.

The images will be powerful, according to Jim Melcher, a political scientist at the University of Maine at Farmington. But so will the coalitions that line up on each side of the debate.

While he said the realtor’s group marked a small coup for opponents, the main prize has yet to be claimed. The Maine State Chamber of Commerce, should it oppose the cap, he explained, could effectively diffuse supporters’ claims that the cap would help Maine’s struggling business climate.

“It’s a Nixon goes to China thing,” Melcher said, referring to the profound impact of the former president’s visit to the once adversarial nation.

The chamber’s president, Dana Connors, said Wednesday it’s not a matter of if – but when – the chamber will take sides.

“Whether Palesky passes or not, we will still have a problem,” said Connors, whose group is undertaking a study of the cap’s potential impacts before offering its endorsement. “This is not tax reform.”

While the opposition is gearing up, it is doing so without much money – yet.

While several PACs supporting the tax cap referendum have raised more than $382,000 – including a $25,000 donation from the owner of DeLorme Publishing Co. – opponents say they have not yet begun to raise money.

Activists on both sides of the issue predict each will raise and spend at least $1 million before voters decide the issue Nov. 2.

Eric Cianchette, a businessman and a leader of the Tax Cap Yes! campaign, said his group is actively seeking business contributions, “and there’s a lot of interest in it.”

Tax Cap Yes!, one of four PACs supporting the tax-cap referendum, has raised $117,986 and spent $60,349 since the campaign began according to its latest report. The other major PAC that supports the referendum, the Maine Taxpayers Action Network, has raised $264,565 and spent $262,454 overall its report says.

The Associated Press contributed to this report.


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