January 18, 2022

Beverage tax repeal effort succeeds

Shortly after midnight, No on One proponents in Portland celebrated their victory in getting Maine’s new tax on beverages repealed.

“When we started this effort seven months ago, we were confident that if Maine people had a voice on these new taxes they would reject them. And clearly, based on the numbers here tonight, they have done so,” said Newell Augur, spokesman for political action group Fed Up With Taxes.

With 79 percent of precincts reporting, the Dirigo beverage tax repeal was cruising to a comfortable victory with about 64 percent of voters in support.

Gordon Smith, a spokesman for the No on One campaign, said that he was disappointed in the result but that it was nonetheless a night to be optimistic.

“We’re very proud of the campaign which we waged with limited resources against a very well-heeled group. We’re proud of every vote we got,” he said.

In a statement conceding defeat, No on One coalition members said that there now is “a lot of momentum in Maine to continue working on our problems with health coverage and especially keeping our kids healthy.”

Tuesday’s vote overturned Maine’s recently enacted law that levied a tax on soda, beer and wine to help pay for and expand the state’s DirigoChoice health insurance programs.

The state’s DirigoChoice programs remain funded by the unpredictable and unpopular Savings Offset Program, which taxes health insurers based on the state’s estimated cost savings from the insurance programs.

Under the new law, the Savings Offset Program would have been replaced by a 1.8 percent surcharge on health insurance claims and the excise tax on beer, wine, soda and other sugary beverages.

The state estimated that together, the surcharge and the excise tax would raise $50 million in the 2009 fiscal year and would replace the controversial funding.

“I think the folks that are supportive of a yes vote say that Dirigo doesn’t work and it’s ludicrous to raise taxes for something that doesn’t work,” Gino Nalli of the Muskie School for Public Service said Tuesday afternoon. “I don’t think we’ve had the honest conversation of whether Dirigo is working or not. Is Dirigo working? Is it part of the solution?”

Nalli said that it would be hard on the health insurance programs to revert back to the Savings Offset Program.

“Dirigo will continue to have this uncertainty and this controversy associated with its funding, which is not healthy for the program,” he said. “It’s going to have a negative impact on Dirigo.”

According to the health policy expert, it was “shrewd” of Fed Up With Taxes to sell Question 1 purely as a tax issue and not as a health care issue.

Voter Mike McGovern of Orono saw the referendum as a tax issue, and he said that it is a bad time to raise taxes.

“The economy is so bad. Extra taxes will just be passed on to consumers,” he said outside the polls.

Another voter, David Kneeland of Old Town, had a different take on the new tax.

“I’m not opposed to it because I think it’s important that we fund health care,” he said.

Several other voters mentioned the confusing wording of the question.

“It was a tricky one,” said Kristen McAlpine of Old Town. “You have to vote yes to say no.”

One political expert cited Fed Up With Taxes’ superior funding and marketing. The political action group raised more than $1.5 million between July and September of this year. In comparison, the opposition raised just $42,000 in the same time period.

“They were louder,” said Mark Brewer, a political science professor at the University of Maine, of the Yes on One efforts. “Louder doesn’t always win. It all depends on which side is more successful at getting the public to look at the question through their frame of reference.”

Correction: 11/6/2008

In some editions of Tuesday’s paper, the beverage tax election story on Page B1 mistakenly reported that the “No On One proponents in Portland celebrated their victory.” The sentence should have read that the Yes On One proponents were the celebrators. Earlier versions of this article ran in the State and Coastal editions.

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