November 07, 2024
Editorial

REFORM, ANYONE?

Twice recently executives of two of Maine’s largest paper mills, Domtar and Fraser, have gone before officials of their towns, Madawaska and Baileyville. In both instances, the reason was to caution that the property tax burdens they bear are unbearable.

As the biggest property taxpayers in their towns by far (Fraser picks up 62 percent of Madawaska’s tab; Domtar 80 percent of Baileyville’s) these businesses have every right to express their concerns. Their concerns were expressed thoughtfully, without hint of threat but instead with offers to work cooperatively with the towns to solve a common problem. As disconcerting as this situation may be, providing warning well in advance certainly is preferable to sudden plant closings.

The problems caused by Maine’s over-reliance on property taxes to fund education and local government are well known. It drives industry away by taxing its very presence. The disconnect between valuation and ability to pay can make it regressive, especially to traditional waterfront businesses and individual owners of long-held family land. It promotes inequity in education, causes annual strife among neighbors at town meeting time and prevents cooperation among towns. What Maine needs – to state the painfully obvious – is tax reform.

Maine almost had tax reform, or at least the chance to hold a vigorous public discussion about it. It has been just one month since two bills that could have led to a thorough look at Maine’s tax structure were before the Legislature. The House was willing to take a look; the Senate was not.

The bills, LD 2086 and 2087, would have done a lot, maybe even too much. Based upon the recommendations of Education Funding Reform Committee, the general idea was to shift the burden from local property taxes to the statewide sales tax, which would have been expanded to include a broader range of goods and services.

There were flaws in this plan, there were reasons to doubt whether gap left by the reduction in property taxes could be filled by sales taxes, but it was a start. Sponsors of this legislation even offered to turn the November referendum on this tax reform (a constitutional amendment would have been required) into a non-binding vote. But the prospect of Maine people having this debate, even if just for the sake of argument, of opening the state’s tax – and, inevitably, spending – policies to thorough evaluation was just too much for the Senate.

It also was too much for the organizations that supposedly represent Maine businesses, including Fraser and Domtar. The Maine Chamber of Commerce, for one, was utterly, even hysterically, opposed to this legislation. It lobbied hard against these bills, asserting that, while Maine needs tax reform, it does not need this type of tax reform. The type of tax reform Maine needed was not, however, specified.

This much-needed opportunity to have this debate denied, these companies now have no option but to go before local selectmen and school boards to plead their case. They have every right. Should this opportunity arise again, perhaps they’ll take their pleas to the lawmakers and organizations that represent them.


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