Study by TABOR group touts merits of plan

PORTLAND – Mainers would have more money in their pockets and the state economy would grow if voters in November approve the Taxpayer Bill of Rights referendum, according to a study released Tuesday.

The analysis by the Maine Heritage Policy Center concludes that a cap on state and local government spending would give the average Maine household $500 in extra cash the first year it goes into effect. In 2019, the study says, the average household would have an additional $3,782 to spend: $2,893 from lower taxes and $888 from higher incomes.

The conservative think tank is the author of TABOR, which would restrict future growth in government spending to increases in inflation and population growth.

“The Taxpayer Bill of Rights provides a stimulus, a jump-start, for the Maine economy,” said Bill Becker, president and CEO of the center. He described TABOR as an “economic relief plan” that would promote economic investment and job growth.

TABOR opponents said the analysis is based on the trickle-down economic theory that lower taxes will promote new investment and economic growth.

Ed Cervone, policy analyst with the Maine Center for Economic Policy, said businesses are attracted to places because of work force training, sound infrastructure such as roads and telecommunications, and research and development – not because of low taxes.

There’s nothing that has shown that trickle-down economics results in economic growth, he said. The policy center’s analysis, he added, is “an oversimplification of the situation.”

“We don’t find much value in it,” he said.

If it passes in the Nov. 7 election, TABOR would limit spending growth at the state, county, municipal and school district levels and require voter approval for tax or fee increases.

Supporters say the measure is needed to rein in government spending and provide tax relief. Opponents say it is a bad idea that would hurt schools and government services.

The center says that Maine has low per capita incomes and high taxes, and that a government spending cap would reverse the trend.

Maine ranks 39th nationally and last in New England in median household income, according to the Census Bureau. Maine’s state and local taxes make up about 13.1 percent of Mainers’ income, while the national average is 10.7 percent, the center said.

If TABOR passes, Maine’s tax burden would fall to the national average in 2019, said Scott Moody, the policy center’s chief economist. The last time that happened was in 1977, he said.

“It took us 40 years to get into this mess,” he said. “It’ll take time to get out of it.”

On the Net: Taxpayer Bill of Rights: www.taxpayerbillofrights.com

Citizens United to Protect Our Public Safety, Schools and Communities: www.notabor.org