Chamber: Tax reform is needed

The Palesky tax cap initiative has probably received more newspaper ink in Maine this political season than the Presidential election. Proponents have cited the need to control “runaway spending” and the dire consequences of taxing old folks and low income people out of their homes. Towns have scurried to calculate the impact of a 10 mill tax cap on their revenue and typically warn of harmful cutbacks to services and schools.

One of the interesting developments locally was the Bangor Region Chamber of Commerce’s resolution, passed unanimously by its board of directors, to oppose the cap. Chamber President Candy Guerette said the resolution was published in the chamber’s newspaper and not one of the organization’s 900 member businesses voiced any opposition.

While this is not shocking, it is interesting. The business community has complained for years that Maine’s economic development has been hampered by its high taxes. While that is still true, they don’t think Palesky is the road to reform.

Bion Foster, chairman of the chamber’s board, would stand to save a bundle under Palesky. After all, the businessman owns some pretty pricey property, the Lucerne Inn perhaps being the most notable. Foster says business needs reliable public works, police and fire protection and that good schools make good communties. At the local level, people have more control over those expenditures. If there is a problem with services, Foster knows where he can go to complain. He sees it as a local control issue and not a tax issue. Palesky, he said, would shift control from the local level to the state level.

“I’m all for tax relief, but this isn’t the answer,” Foster said.

And the spending reductions from the tax cap would likely raise havoc with the bottom lines of many local businesses.

Just ask Andy Nickerson at Wight’s Sporting Goods in Bangor. Wight’s sells athletic equipment and uniforms to scores of schools that provide about 90 percent of the work for Nickerson’s 13 employees. And most towns have said it would be hard to justify athletic programs in post-Palesky budgets.

At the Staples office supply store on Bangor Mall Boulevard, Paulette Porro says at least half of the store’s revenue comes from sales of paper, pencils and other office supplies and furniture to local governments.

Another problem with drastically reduced city budgets is that there would be less leeway to pay for spending that can’t be precisely budgeted and controlled. Consider snow removal and sanding in the winter, when Mother Nature and not a town meeting decides how much will need to be spent just to guarantee public safety on icy roads.

Frank Lemanski of Harcros Chemicals in Westbrook says Maine roads require about 400 tons of salt each winter, but it can vary a lot depending on the year. Harcros is one of three main suppliers of the salt.

The salt comes from many sources, but it all arrives in Maine through huge barges powered by diesel fuel and is stockpiled near the ports in South Portland and Searsport. With diesel prices skyrocketing, salt prices are expected to escalate.

David Cote, public works director in Brewer, said his city might expect to spend $80,000 for winter salt. But the diesel prices are a wild card that could result in prices increasing from $38 to as much as $54 a ton. Ouch.

Too often in the heat of political debate, candidates make it sound as though the private and public sectors are totally unrelated. I think back to my Navy days years ago when I worked in communications and General Electric came to install new equipment, show us how to operate it, and also came to fix it when needed. Sometimes GE people felt like my bosses.

And one of Maine’s biggest “private” employers is Bath Iron Works, which lives on government spending.

But back to Palesky. Foster is quick to agree with Palesky that tax reform is desperately needed, but not at the expense of local control.

In fact, the chamber proclamation calls the tax burden on Maine people excessive and that the “Chamber supports an aggressive effort to substantively and responsibly confront the complex issue of Maine’s high taxes.”

While the Chamber is hopeful the tax cap fails Tuesday, it also is hopeful that Gov. John Baldacci and legislators will read the writing on the wall and do something serious about tax reform come January and a new legislative session.