December 21, 2024
Archive

Maine income tax checkoffs will total 10 in ’06

AUGUSTA – Maine taxpayers will have no fewer than 10 contribution checkoffs on their 2006 income tax forms where they can give to charities, political parties, cemetery maintenance, lung-disease research and other causes when they file their tax returns.

With 10 checkoffs on its forms, Maine is now near the top of the 41 states that have voluntary contribution checkoffs on their tax forms, according to the Federation of Tax Administrators’ data for 2003, the most recent state-by-state comparison available.

The addition of checkoffs for the Maine Asthma and Lung Disease Research Fund and the Maine Veterans’ Memorial Cemetery Maintenance Fund has renewed debate on whether the state goes too far in allowing its tax-collection system to be used as a fundraising tool for outside groups.

During the last legislative session, Rep. Richard Woodbury, an independent from Yarmouth, proposed getting rid of all checkoffs. The groups that benefit from them objected and the idea went nowhere.

The state should automatically sunset checkoffs after a few years, Woodbury says, or at least get rid of those that don’t meet a contribution threshold to show they have significant public support.

“It does make me a bit uncomfortable to see the income tax used for this purpose,” Woodbury said. “The tax system probably is not the appropriate way to do charitable fundraising.”

In Maine, tax form checkoffs allow taxpayers to contribute to specific causes by deducting contributions from their refunds or adding contributions to their tax liability.

The checkoffs do not deprive the state of tax revenue, but they carry annual administrative costs of about $5,000 per checkoff, according to Jerome Gerard of Maine Revenue Services.

In some cases, state law allows the tax agency to take back the full $5,000 off the top of the contributions for reimbursement, Gerard said. But in other cases, state law caps the state’s reimbursement at $2,000, leaving state government holding the bag for the balance.

Of the eight existing income-tax checkoffs, the Nongame and Wildlife Fund received $46,257 in 2004, while the Maine Children’s Trust Fund got $39,659.

The checkoff netted $38,597 for the Maine Military Family Relief Fund; $24,407 for the Companion Animal Sterilization Fund; $15,951 for the state Democratic Party; $8,662 for the Human Lukocyte Antigen Screening Fund; $6,053 for the Republican Party; and $5,030 for the Green Independent Party.

Advocates say the checkoffs are a convenient way to raise money and give taxpayers an easy way to help out.

“It’s really an investment in the future,” because Maine has high rates of lung disease and one of the highest asthma rates in the country, said Edward Miller of the American Lung Association of Maine.

Sen. Joseph Perry, D-Bangor, supports a moratorium on new checkoffs so the Legislature can study the issue. Perry and Woodbury are co-chairmen of the Legislature’s Taxation Committee.

Perry said he is concerned about the costs to the state and the possibility that Maine is at or near the saturation point, increasing the chance that each new checkoff is taking money away from the others.

“If we don’t have too many [now], we’re probably approaching it,” Perry said. “They are all worthy causes, but as you get more and more [checkoffs], it dilutes the effect.”


Have feedback? Want to know more? Send us ideas for follow-up stories.

comments for this post are closed

You may also like