Baldacci prepares restructured tax proposal

AUGUSTA – Gov. John Baldacci is getting ready to put forth a new package of policy proposals that he has pledged will respond to popular calls for taxpayer relief.

The governor’s unveiling is likely to come shortly after the new Maine Legislature is sworn in on Wednesday. And the package is expected to take into account the Maine State Chamber of Commerce’s mid-September alternative to the property tax cap ballot question that was rejected by voters Nov. 2.

Critics including Baldacci and the Chamber came out against the referendum plan to cap property taxes at 1 percent of assessed value that was championed by Topsham activist Carol Palesky, saying it was too extreme.

In voicing opposition, however, critics were careful to credit potential supporters of the ballot question with justifiable dissatisfaction over Maine’s tax structure and state government’s halting efforts to change it.

The Chamber’s alternative would cap the growth of state government spending at the rate of real personal income growth, not to exceed 2.75 percent annually, as long as Maine’s tax burden is among the nation’s highest.

It seeks to cap local, school district and county spending growth at a similar level, with some allowances for new development.

In addition to other provisions, it would create a revenue surplus account, with most revenues directed at tax relief. It also would provide that virtually no Maine resident pay more than 6 percent of income on property taxes.

Another plan proposed by tax activist Mary Adams and the Maine Heritage Policy Center is modeled on Colorado law and would create a government spending cap.

The Baldacci administration says Maine’s local-level tax burden is second in the nation but maintains that by resisting taxes at the state level Maine’s ranking there has been brought down from eighth to thirteenth.

Favoring budget caps for schools and county and local government, as well as the state, Baldacci also wants to increase state funding for education by almost $250 million over two years, with the bulk of that targeted for property tax reduction.

Urging accelerated legislative action, Baldacci has said he would like to see a special committee named and set to work next month to demonstrate that, when it comes to tax reform, “this is not business as usual.”

On Wednesday, the Maine Better Transportation Association, which says it represents 700 businesses and transportation-related organizations, announced its support for the Chamber’s Maine Plan.

“Our members have a lot at stake,” association President Darren Shiers said in a statement. “We need an affordable tax burden so we can be competitive in bidding for jobs, and produce a good value for taxpayer and private dollars. But we also need long-term and stable investment in our states roads, bridges, airports, seaports and rail facilities.”