MMA lobbyist urges Palesky cap defeat

ROCKLAND – Town officials can’t afford to wait to see if the Palesky tax cap proposal is passed by voters in November. They need to prepare now and make the public aware of the tax cap’s impact, according to a lobbyist for the Maine Municipal Association.

The tax cap referendum was initiated by a citizen petition and will be on the Nov. 2 state ballot. It would cap property taxes at $10 per $1,000 of assessed value.

Whether or not the measure passes, cities and towns need to plan for the possibility of adoption, Jeffrey Austin, a legislative lobbyist for the Maine Municipal Association, said during a presentation Thursday in council chambers, which detailed some of the issues surrounding the Palesky proposal.

The meeting was well-attended by municipal and school officials from Knox County towns and Waldoboro.

“We are against the Palesky proposal and we are asking people to vote no,” Austin said, telling attendants to visit MMA’s Web site at www.memun.org to access information about how the tax cap would affect Maine communities.

People need to know what the impact of voting yes is to their towns before going to the polls, Austin said, urging municipal officials “to give taxpayers a sense of what it’s going to do” to municipal services and potentially school programs and operations.

MMA believes the majority of the 3,200-word Palesky proposal is unconstitutional, he said, adding, “this has never been reviewed against Maine’s Constitution.”

The Palesky proposal prohibits towns and the Legislature from changing the tax rate in the future, Austin said, noting the only way to alter the rate is by a two-thirds majority vote statewide.

During the session, there seemed to be more questions than answers about the proposed tax cap.

It is yet unknown what the state will do if the tax cap succeeds, Austin told several questioners. Some people are under the impression the state will bail out towns hit hard by the tax cap.

Noting that in 170 Maine towns school taxes alone account for $10 per $1,000 of assessed property values, Austin said, “You can’t force them to share in the pain.”

“It’s unreasonable to think schools aren’t going to participate,” South Thomaston Selectman John Spear said. Spear also is SAD 50’s business manager. “To think schools won’t suffer from this is flawed.”

Jeff Evangelos of Friendship, a former SAD 40 business manager, said the bailout would be through increased sales and income taxes.

“We would need a sales tax of 9 percent,” he said, calling the Palesky proposal “a tax ship to help wealthy nonresidents.”

Rockland is one municipality that would get whacked – to the tune of a $4.85 million tax revenue loss.

A tax cap committee has already begun reviewing the impact, City Manager Tom Hall said. The group still has $1.3 million left on the table to cut, he said.

Hall advised other town officials to “try to do the work,” so the revenue loss is put into perspective.

“It really hits home,” Hall said.