No on Question 1

Do you want to limit property taxes to 1% of the assessed value of the property?

To say Question 1 is bad fiscal policy, bad education policy and an unwarranted swipe against local control doesn’t really begin to describe it. If passed, the Palesky tax cap would become the prime obstacle over which the Legislature, municipal governments and school boards would struggle for years. It would become legislation to get around and an excuse not to invest public resources more wisely.

The tax cap would chop the average local mill rate from around 18 to 10, cutting off money for town programs, emergency services, schools, county government and regional economic development. It would not strike all towns equally, so some would see steep cuts, some almost no change and a few could see their taxes rise as the effects of revaluations are felt.

The middle class, families with children in school, the elderly who depend on public services would see the smallest tax gain and the largest drop in benefits under the cap. Those in expensive houses, with incomes too high to qualify for property tax breaks, would receive the largest benefit. Why its supporters believe this makes for good policy has never been explained.

The Palesky tax cap assumes that some of its hundreds of millions of dollars of damage to local government will be mitigated by the state, which despite shortfalls of its own is expected to send them more sales and income taxes. Given the passage of the June referendum on school funding, this might happen in a partial way. But it won’t happen for long or without strings.

Maine knows through its own experience and through the experience in other states that local revenue sharing is one of the first cuts made when the money runs dry at the state capitol. It is for that reason – a dramatic failure of local funding by the state in the early 1990s – that Maine now finds itself facing the Palesky plan. The answer is not to repeat the problem.

For those who think the push by Augusta for regionalization is heavy-handed now, imagine what would happen if the state were paying more of the local bill. Writing about property tax caps in State Legislatures magazine this month, Professor Janet M. Kelly of Cleveland State University said, “For localities, state centralization means loss of local control and accountability and a set of one-size-fits-all services that leave some citizens paying for services they do not want or need. Conversely, centralization may also leave some localities unable to afford services their residents want or need because the primary means to finance them has been restricted.”

The Palesky tax cap is a means to reward large tax benefits to a few, take control away from many, impose costs you may not want and render towns too poor to afford what they do want. Even if you doubt the threatened wide-ranging cuts in services that municipalities say will occur under the cap, why empower Augusta, the source of the problem, to distribute the remaining money?

In pointing out the flaws in the tax cap proposal, it is obligatory to also note that Maine has a serious tax burden, one that can’t simply be shifted among the taxes the state now has. It requires thoughtful and long-lasting changes in policy that both lower taxes and raise wages. Please support those changes when they come along.