The alternatives do nothing to address Maine’s antiquated tax structure.
This November, Maine citizens will vote on a tax reform proposal sponsored by the Citizens to Reduce Local Property Taxes Statewide. “The People’s Proposal” – Question 1A – struck a cord with the voters of Maine as over 100,000 people statewide signed petitions to place the proposal on the ballot.
The proposal was as result of frustration with the Legislature’s refusal and inability to address tax reform. For decades, the Legislature has discussed, debated and studied the problems with Maine’s antiquated tax policy and failed to take action.
Angry property owners told us their local property taxes are too high. Burdensome local property taxes impact the elderly, young property owners, renters and local businesses. Maine local property taxes are 76 percent higher than the national average. The reality was clear to us; there is a property tax crisis and we decided to take action.
In a nutshell, Question 1A was crafted to be reasonable and achievable, to provide property tax relief (about 15 percent on average statewide), to compel tax reform and to create incentives for leaner government and to develop a plan to remove Maine’s embarrassing title of “highest taxed state in the nation.”
In August, the Legislature hastily put together a competing measure Question 1B on the ballot that further delays property tax relief, doesn’t address Maine’s tax burden or reform the tax code.
In fact, 246 towns will lose education funding under the 1B proposal, and 95 of those will go to zero dollars of state education aid. 1B says that it will get to the 55 percent funding level by 2010. That’s laughable and is just another promise that will be broken by the Legislature.
The third option – Question 1C – is on the ballot triggered by the Legislature’s creation of a competing measure. 1C is not a “proposal;” it’s a do-nothing option that assures Maine’s property tax crisis will continue. It provides no tax reform, no property tax relief and maintains the status quo.
“The People’s Proposal” was designed to provide the catalyst to move tax reform ahead. The following is a review of the four key components of Question 1A compared to 1B and 1C:
• Question 1A will reduce local property taxes by an average of 15 percent statewide and force the state to pay 55 percent of the cost of K-12 education. 1A simply makes the state fulfill a promise it made nearly 20 years ago. No more 42 or 43 percent support from the state. 1B and 1C will actually increase local property taxes in the first year by $45 million and $60 million respectively.
• Question 1A compels the Legislature to engage in comprehensive tax reform. This would update Maine’s antiquated state tax code and make the revenue flow more stable. At present, over 44 percent of all state tax revenues come from property taxes, while only 24 percent comes through the sales tax, and the less than 32 percent comes from income taxes. 1B and 1C offer no tax reform at all.
• Question 1A will require the Legislature to adopt a comprehensive plan to reduce Maine’s tax burden. This would be a road map for state, county, school and town spending habits to be brought under control, so that as a matter of tax burden our incomes rise faster than the growth of our governments. Did you know state spending increased 17 percent in 1999 during a boom cycle period? This “boom-bust” budgeting cycle has to stop. 1B and 1C are completely silent on how to fix the “boom-bust” cycle. Did we not learn from history?
• It will give incentives to local schools and towns to do things more efficiently. It creates incentives for schools to share services, become more efficient or even consolidate. Likewise it creates incentives for towns that deliver services more inexpensively. Neither 1B nor 1C do that.
I am in this coalition because I have to see the pain in the eyes of the people from whom I have to collect property taxes. Each year we live with more excuses, broken promises and unfunded mandates from Augusta, and it’s time for that to change. It’s time for them to fulfill this broken promise.
A yes vote for 1A will stir things up. It will deliver property tax relief next year. The people in my town, and across the state, need and want tax relief.
We urge you to vote yes on Question 1A.
Dana K. Lee is president of Citizens to Reduce Local Property Taxes Statewide and the town manager of Mechanic Falls.
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