AUGUSTA – Voter approval of a November referendum question on property tax relief carries such a high price tag it potentially could trigger tremors through Maine’s fragile economy that would be felt into the next decade, according to Gov. John E. Baldacci.

The governor said Friday that it was simply “irresponsible” for proponents of the citizens’ initiative to continue to advance the Maine Municipal Association’s plan without explaining how it would be funded.

After gathering more than 96,000 signatures, the MMA was able to place its question on the fall ballot requiring the state to increase its share of local education funding from 43 percent to 55 percent by 2005. If voters support the question, Maine lawmakers would have until March 1, 2004, to identify where the state would find the $264 million needed to fund the law at 55 percent.

Already perceived as one of the highest-taxed states in the country, Maine definitely would feel the pinch of the new law, according to Baldacci, who doesn’t care to speculate on the size of tax increases or depth of program cuts it would require. He also is dubious of the MMA plan because it does not compel Maine cities and towns to use the additional money to decrease the local tax burden.

“Frankly, it could place the state on a crisis course and may even necessitate a solemn occasion involving the courts because of the significance and seriousness of this particular issue,” the governor said. “This is serious stuff and I’ve told [the proponents] that they’re putting the state on the road to economic crisis. And it could also be a political crisis, because there is no mechanism within this proposal to ensure property tax relief.”

The governor’s remarks arrived on the heels of a 10-3 vote on Thursday by the Legislature’s Taxation Committee in favor of placing his tax relief proposal on the ballot alongside the MMA’s question as a competing measure. If the full Legislature enacts the governor’s proposal Aug. 21 when it convenes for a special session, voters would have the option of approving either question, or rejecting both on Nov. 4. If neither question receives a majority of the vote, the option with the highest number of ballots would be considered again at a later time as long as it received at least 33 percent of the total number of votes cast.

Like the MMA plan, Baldacci’s competing measure also would increase the state’s share of local education funding to 55 percent – but at a slower, phased-in rate, deferring 100 percent of the funding goal until fiscal year 2010. Another major distinction between both plans lies in the funding mechanism. The MMA question offers no recommendation on how the state would generate the $264 million needed in 2005 to fund its proposal. Instead, it simply hands lawmakers the mandate, and lets them decide.

In contrast, Baldacci would pay for the increase of nearly $300 million over five years by dedicating to it most of the state’s annual growth in revenues, estimated at $100 million per year. That’s too long to wait, according to Dana Lee, president of the Citizens to Reduce Local Property Taxes Statewide political action committee. Lee told members of the Taxation Committee the governor’s timetable for the initiative actually shortchanged municipalities in 2005 because that is the first year the state’s new Essential Programs and Services school funding formula will become effective. The Legislature chose to phase in EPS over five years because the state lacked sufficient revenues to begin the new program at 100 percent during the first year.

As a result, the Baldacci plan for tax relief would pay only 84 percent of EPS costs in 2005, which the administration equates to a 49 percent state share for local education expenses. The governor’s goal is to have the state’s share of EPS at 100 percent, and its share of local education costs at 55 percent by the year 2010. This would be achieved gradually, by increasing the state’s share of each by about 2 percent annually.

In 2005, the administration’s plan also would provide an additional $27 million to Maine cities and towns over the 2004 educational allotment of $725,817,941. This and the governor’s larger annual increases, ranging from $64 million in 2007 to $71 million in 2010, were discounted by Lee as “balloon payment targets” that are perceived with more than a tad of skepticism by many municipal and educational planners.

“Without some effort to comprehensively reform Maine’s antiquated tax code, it is not at all clear how the state will be able to honor these funding targets,” Lee told lawmakers Thursday. He added that it was difficult to believe future Legislatures would agree to use more than 60 percent of their entire pool of unallocated revenues for education. “From our perspective, the need to address the property tax burden in a very significant way is much more important than [the governor’s] proposal recognizes.”

The governor said Friday that, unlike the MMA’s proposal, his path toward achieving 55 percent of educational funding is “substantial” and can be funded with “real revenues.”

If, for example, the Legislature chose to cover all of the money it would need to fund the MMA plan by increasing the sales tax, an administration staffer estimated taxpayers would have to ante up 6.5 cents on the dollar for their purchases.

“And it still wouldn’t guarantee property tax relief,” Baldacci said. “So for these purposes, an additional $27 million in 2005 is nothing to sneeze at.”