Debaters agree tax reform needed

WATERVILLE – Although the two guest speakers at the Palesky tax cap debate were on opposite sides of the fence Thursday morning, they were solidly together on one point: their disappointment that the Legislature isn’t dealing with property tax reform.

Yellow Light Breen, vice president and general counsel of Bangor Savings Bank, spoke out against the cap, telling the Waterville business leaders gathered at Thomas College that he hasn’t met a single person who doesn’t want property tax reform.

“But this cap is not an opinion poll,” he said. “The consequences are so dire and it is so poorly written that it is like a screen door on a submarine.”

The cap’s proponent, Thomas McBrierty, a private consultant from Scarborough who is a former commissioner of Maine’s Department of Economic and Community Development, agreed that the cap proposal “sure isn’t pretty” but said it is rooted in “a lack of confidence based on what did not happen in the last Legislature.”

The plan, which will be on the Nov. 2 ballot, was initiated by a citizen petition and would cap property tax assessments at 1 percent of assessed value, dramatically dropping revenues to municipalities. Opponents maintain that massive cuts in local services and school programming will occur if the plan passes, while proponents think it will force municipalities to become more efficient and require the Legislature to immediately deal with tax reform.

Breen warned that “a tax shift is not tax relief.” He said that Waterville, for example, could lose 59 percent of local revenue. “If those revenue sources shift to Augusta, so does authority,” he said.

A huge flaw in the plan, he said, is that windfall tax cuts would be provided to big corporations and big-box retailers.

“Wal-Mart alone will receive a $2 million tax break,” said Breen. “The Maine Mall in Portland will get a $1 million break. The equity of who pays is not there.”

In California, which underwent a similar reform, local assessments and taxes increased by 516 percent to make up the revenue difference, Breen noted. “Meanwhile, California schools went from being among the best to one of the worst,” he said. “Do you want Maine to look like California?”

McBrierty admitted that he was a reluctant participant in the forum.

“Frankly, if the Legislature had done anything, anything, I would not be here,” he told the 50 members of the Mid-Maine Chamber of Commerce. “I don’t have the confidence that Augusta can deal with this on its own. In order for anything to change, we will have to do it from the outside.”

McBrierty said the median income in Maine has dropped in recent years by $2,000, while in neighboring New Hampshire, it has risen $7,000. “We’re going the wrong direction,” he said.

McBrierty said that during that same time, state government spending grew at three times the rate of inflation.

State spending is the issue, he maintained, and added that he supports the Maine Chambers of Commerce plan that includes spending limits.

McBrierty said the latest polls indicate that support for Question No. 1, the Palesky plan, is at a dead heat.

And what would happen if the Palesky plan passes?

“Regionalization,” McBrierty said, “and spending limits.”

“Chaos,” Breen said. “Do you trust Augusta to clean up this mess? I don’t.”