AUGUSTA – Gov. John E. Baldacci could call lawmakers back to the State House for a special session on tax reform as soon as this fall if legislative leaders can reach consensus on key elements of the proposal.

The governor said Tuesday he wants to address tax reform to continue the momentum initiated in January when the Legislature passed LD 1, a bill designed to hold down spending at all levels of government in the state.

“Our whole policies have been about making Maine a leader and providing opportunities for individuals and businesses,” Baldacci said. “I’m committed to working on tax reform and look forward to working with the Legislature.”

Earlier in the day, a lobbying group favoring a realignment of the state’s tax burden issued a statement calling for quick consensus on a tax reform package by legislative leaders. Members of Taxpayers for a Fair Budget, a diverse coalition of more than 20 statewide organizations, already have met with Baldacci, House Speaker John Richardson, D-Brunswick, and Senate President Beth Edmonds, D-Freeport, to seek their support for LD 1595, an Act to Rebalance Maine’s Tax Code. The bill has been carried over to the January session of the Legislature unless it is taken up sooner in a special session.

Ernie Marriner, chairman of the Tax Reform Committee at the Maine Chapter of the American Association of Retired Persons, said the proposal would bring tax relief to many Maine families.

“LD 1595 lowers income and property taxes for Maine residents – substantially for those who need it most – and pays for it by closing special-interest sales-tax loopholes,” Marriner said in a prepared statement. “Our members believe this to be an essential step in assuring a stable revenue stream and protecting vital services.”

As proposed, the bill would lower the state sales tax from 5 percent to 4 percent, but would raise taxes in numerous other areas including liquor and restaurant meals. The taxpayers group said the bill would further expand the circuit-breaker property tax relief program and fully fund the Homestead Exemption, which is now only half-funded by the state.

State Rep. Deborah Hutton, D-Bowdoinham and a member of the Legislature’s Taxation Committee, supports the tax overhaul claiming Maine’s sales tax base is “one of the narrowest in the nation” and is largely responsible for the state’s “boom and bust budget cycles.” She said the bill would attempt to bring stability to the state’s tax structure, which now draws about 30 percent of its revenue from the income tax, 21 percent from the sales tax and 44 percent from the property tax. Leading economists long have recommended revisions that would equalize the burden to one-third for each revenue component.

“As we face coming challenges like possible base closures and unfunded federal mandates that drain our budget and loss of vital services, we must assure our quality of life in Maine remains high,” Hutton said. “While many in Maine pay a high percentage of their income in taxes, others are not paying their fair share. That has to change.”

Republicans did not share Hutton’s assessment on the need for sweeping revisions to the state’s tax system and were caught off-guard upon hearing a new special session could be called within two months.

“The governor certainly hasn’t spoken with Republicans about his plans,” said House GOP leader David Bowles of Sanford. “I think it would be embarrassing for him if we were to have a special session and nothing were to result from it. It would be just one more failure in a long string of failures.”

Senate Republican leader Paul Davis of Sangerville said many communities already are choosing to exceed the spending caps that were supposed to be contained under LD 1. He wondered exactly what the governor had in mind when he considers tax reform.

“If he’s going to do something, I hope it comes out better than LD 1 because that’s been an absolute disaster,” Davis said. “I thought we were done here last month, and I’d just as soon we stayed done until January.”