Officials look to state for tax reform

The Palesky tax cap was put to bed by Maine residents Tuesday, but the question of high taxes remains with legislators as well as municipal and county officials.

Gov. John Baldacci has said tax reform needs to be a high priority in the next legislative session.

Municipal officials agree, but some are not optimistic.

Ryan Pelletier, town manager for St. Agatha and vice president of the Maine Municipal Association, was headed to an MMA meeting in Augusta on Thursday to see what municipalities need to do to work with legislators.

“We need to make them aware that tax reform is a much-needed thing in Maine,” he said. “This [tax revolt] has been brewing for quite a while, and while Palesky [the tax cap proposal] is gone, others will come along.

“We need to deal with it, and the Legislature will have to step up to the plate and do something,” he said. “I am not optimistic that legislators will do anything.”

Like other municipal and county officials in Aroostook County, Pelletier fears that “partisan politics will get in the way again.”

In Aroostook County, the Aroostook County Municipal Association will get together with legislators later this month to look at the question. Next month, there will be a regionalization summit for Aroostook County officials.

The question of tax relief hits home for most officials, Aroostook County administrator Douglas Beaulieu believes. His arm of government has kept its budget at an average increase of 2.5 percent over the past 10 years.

“I think we have been prudent with our financial resources,” he said. “We are ever mindful of concerns of burgeoning growth of government.

“We are not going to change that perspective, and we are constantly talking about regionalization of services,” he said. “It is not as easy in Aroostook as elsewhere in Maine because of our large geographic area.

“The state needs to get their house in order,” he said. “Typically, legislators go to Augusta with good intentions but the strength of political parties takes over.

“It’s up to the leadership to promote compromise and work together,” he said. They need to compromise, and understand that the public is sick of rhetoric, and they want action.”

Beaulieu thinks it can happen, and time will tell whether it does.

Caribou’s city manager, Stephen Buck, also believes the answer comes from Augusta, even though towns and cities need to look at their own ways of conducting day-to-day business.

“We’ve continuously looked at how we offer services, and we are very receptive to regionalizing services,” he said Thursday. “My desire is to see all this momentum go forward.

“There is no excuse for not coming forward with tax reform proposals in the next year,” he said of the Legislature. “There is no reason why tax reform should not occur this year.”

Like most municipal officials, Buck does not want a repeat of Palesky-type initiatives. He knows many towns and cities spent a lot of money and time to defeat the tax cap proposal.

Caribou is part of the Maine Service Center Coalition that is reviewing the Maine Chamber of Commerce’s proposal for tax reform. The city has sent letters to legislators asking them to work on tax reform, and they have offered the city’s assistance.

“We need more logical tax reform, post-Palesky,” he said. “We need to address all aspects of this, and people need to understand that capping the mill rate was not the answer.

“We need spending controls at the local, county and state levels,” he said. “We need to look at what’s wrong with our system, and we need to balance the system better.”

Buck said he believes there are answers in other states and Maine needs to look for them there.

In the end, Pelletier said he believes legislators don’t have a good track record when it comes to taxes. He thinks residents need to put the pressure on legislators.

“I don’t know too many municipal officials who are optimistic,” he said. “Most municipal budgets are up because of school costs that the state has not paid. … Local budget cuts are up to the people of the town,” he said. “They can cut any part of the budget they want at town meetings.”

Pelletier said he believes that local officials can help set the bar, but towns need leadership from Augusta where tax policies have been created that make it hard for people and businesses to succeed.

“At the end of the day, tax policy is made in Augusta,” Pelletier said.