Speaker pushes for early consensus on tax plan

AUGUSTA – Democratic House and Senate leaders are pressuring members of a special property tax reform panel to approve a draft proposal for tax relief by Friday, the same day the governor is expected to present his two-year state budget to the Legislature.

Members of the Joint Select Committee on Property Tax Reform had been laboring under the assumption they would vote on the governor’s tax bills on Jan. 14. House Speaker John Richardson, D-Brunswick, said the myriad details in LD 1 and LD 2 will require review by legislative analysts before a final committee vote can be taken on Jan. 14 and that it was important that the key elements of the proposal were nailed down by Friday.

“We want to reach our tentative agreements in total and then have the analysts craft the language,” said Richardson, who wants the full Legislature to vote on the proposals by Jan. 20.

“Friday is the current objective, but I really don’t know how realistic that is,” said Rep. Harold Clough, R-Scarborough, a member of the tax panel. “At this point, I think it’s going to be very difficult to have something meaningful by then.”

Overall consensus on a tax relief proposal was hard to find Tuesday at the State House. Members of the tax panel have rejected a reverse mortgage option in Gov. John Baldacci’s plan that would have allowed overtaxed homeowners to borrow money from the state to pay their taxes.

The governor’s major goal is to sign legislation limiting the average Mainer’s property taxes to 6 percent of annual income. He has included an additional $18 million over the next two-year budget cycle to further that goal by beefing up the Maine Property Tax and Rent Refund Program, also known as the circuit breaker program.

In an effort to provide relief to coastal communities, the committee gave preliminary approval Tuesday to the concept of a “working waterfront” bill giving seaside municipalities the option of holding down taxes that have skyrocketed with shorefront property sales.

Baldacci also expects municipal property taxes to decline by providing an additional $250 million to increase the state’s share of education costs. The additional funding is the governor’s response to last June’s ballot question when voters approved raising the state’s share of education costs to 55 percent. The governor’s plan would take the state to 50 percent at the end of two years and 55 percent at the end of four years.

Some lawmakers want the governor to reach the 55 percent goal immediately, which would effectively double the $250 million offered in the current tax relief proposal. Although the governor and the committee have vowed to oppose a tax increase to raise the money needed to provide property tax relief, a plan to raise the sales tax from 5 percent to 6 percent was under consideration among some legislators. The new tax would allow the governor to provide 55 percent education funding immediately and, theoretically, would be repealed in two years.

Democrats such as Rep. Joanne Twomey of Biddeford would be happy with a sales tax increase if it provided effective property tax relief. During a Tuesday meeting of House Democrats, she objected to the speaker’s intention of obtaining a vote on a draft proposal on tax relief before lawmakers are told exactly what’s in Baldacci’s budget package. Cutbacks in services are expected as the governor closes a $733 million budget gap between projected state revenues and program costs.

Twomey said she wanted to know where the program cuts were going to fall before she would agree to sign on to any tax relief package and asked fellow Democrats why taxes couldn’t be raised to meet the state’s needs.

“The governor has said no, and we don’t have the votes to do otherwise,” replied Rep. Arthur Lerman, D-Augusta.

“Well, why can’t we hold the governor’s feet to the fire for once?” Twomey asked. “I’m tired of carrying his water.”

Other Democrats, such as Rep. Sean Faircloth of Bangor, said it was important for the governor’s office to provide lawmakers with a budget summary as soon as possible since the Legislature is facing a Jan. 20 deadline for a vote on the tax relief plan. Rep. Herbert Clark, D-Millinocket, agreed.

“Most of the people in the caucus want to know where the money is coming from before we make any decisions,” Clark said. “I think there’s going to be a lot of questions about this tax relief proposal and a lot of things will have to be ironed out between now and Jan. 20.”