November 15, 2024
Editorial

A Push on Tax Reform

No Maine governor in recent memory has accomplished more in his first six months than John Baldacci. But for as much leadership as he has shown, he has needed the Legislature to work with him on all major projects – closing the budget gap, setting the June bond question, closing the budget gap, passing Dirigo Health, closing the budget gap. Still, there is more to do, and as the Taxation Committee meets today to resume discussions on tax reform, getting more done will depend heavily on legislative leadership and the governor coming to agreement on a reform measure to place before voters in November.

Tax reform was debated for years in Maine before it became a serious issue among lawmakers. Part of the reason for the delay was the previous governor’s reluctance to take on the topic, which forced the Maine Municipal Association, its members stuck with high property taxes, to develop an initiative of its own. After gathering a record number of signatures, its question will be on the next ballot. It is in many ways a sound measure, but it was crafted in what was a different time in Maine: Gov. Baldacci’s aggressive approach to solving state problems suggests he would not have allowed the matter to drag out for as long as it has. It is not surprising that he is pushing now for an alternative to the MMA proposal, one that will also build in long-term efficiencies designed to lighten the overall tax burden.

But his plan has yet to capture the hearts of a sufficient number of lawmakers, in part because it would eliminate, or in an amended version, reduce, the Homestead exemption, which goes to everyone who pays property taxes, and target the money to lower-income residents through the Circuit Breaker program.

There are other disagreements, including over a plan to offer a local-option sales tax, even as there is a general understanding that while the MMA proposal is substantial, it requires a yet-to-be-determined broad-based tax on the state level to compensate for reductions in local property taxes. How many lawmakers want to gather next year to pass a tax increase to pay for this initiative? Not many.

That’s why leadership is needed now, this week, to settle on a ballot alternative and leave enough time to present the idea to the public through the summer and fall. It is understandable that House and Senate leaders and the governor have not spent enough time doing this, given everything else that has been accomplished, but the Taxation Committee has been debating this for months and is unlikely to suddenly find new answers.

Having it meet some more over the same issues would be far more productive if leadership came to agreement on some of the more difficult parts of the reform.

Lawmakers have done a commendable amount of work this session. Leadership could quickly help them accomplish more.


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