Tax relief panel specially created by legislators Governor’s bills arrive at State House

AUGUSTA – Newly installed lawmakers immediately sought to emphasize their commitment to tax relief Wednesday, voting to create a special committee to recommend policy changes to the full Legislature by Jan. 14.

On the first day of the new legislative session, lawmakers received copies of the first two bills they will consider from Gov. John Baldacci.

The first bill, which Baldacci outlined at a news conference Tuesday, is An Act to Increase the State Share of Education Costs, Reduce Property Taxes and Reduce Government Spending at All Levels.

The 70-page measure, which as the first legislative document of the session is listed as LD 1, was designed to implement a multipart policy package that Baldacci calls tax reform.

Aiming to boost state aid for local education and curb government spending at all levels, the measure also would effect changes in the education funding proposal that was approved by referendum voters in June.

The second bill, LD 2, is an accompanying resolution proposing to amend the Maine Constitution to authorize municipalities to limit tax rate changes on homestead land – “land that is exclusively and continuously owned by one or more residents of the state while the land remains the principal home of each owner.”

Under the proposed amendment, the rate of change in taxable value could be limited to “the rate of change in purchasing power of United States currency” as measured by an index the Legislature would adopt.

Appointments to the new Joint Select Committee on Property Tax Reform could come within a few days. The committee will be made up of four senators named by the Senate president and 11 members of the House of Representatives named by the speaker.

Leaders of the new Democratic majorities have pledged to move quickly on Baldacci’s legislation, with an eye toward completing their work by Jan. 20.

That date, according to state election officials, is the deadline for submitting petition signatures to get a referendum question on a 2005 statewide ballot. The Maine State Chamber of Commerce has proposed a question to cap property taxes and link state spending to income growth.

Baldacci says he is seeking to ensure that no Maine resident would pay more than 6 percent of income in property taxes. His proposal for property tax relief relies on a combination of income-tied refunds and what he called a tax deferral loan program, with repayment to come when property transfers.

House Speaker John Richardson, D-Brunswick, told House members Wednesday that expeditious action was essential. House Republicans have issued a brief statement basically crediting Baldacci for making a good start in opening discussions while reserving the right to scrutinize the details of his plan.

The full House and Senate will not begin to hold regular floor sessions until after the first of the new year. To meet a mid-January deadline for making recommendations, the new joint select committee can be expected to get to work this month.

Earlier this year, Maine voters approved a citizen initiative backed by the Maine Municipal Association to increase state aid for public schools from about 42 percent to 55 percent of total costs, but rejected the Palesky proposal to cap property taxes at $10 per $1,000 of assessed value, based on values in 1996-97.