Posted on 10/02/2002 5:13:23 PM PDT by SheLion
If there's a big puddle of water in the middle of the basement, a homeowner checks for leaking pipes and calls the plumber.
If there's a pool of oil in the garage, a driver gets a mechanic to inspect the car's plugs and seals right away.
And when three different groups, two of them grass-roots and one a statewide governmental association, say they're holding petition drives for referendums on tax reform, voters could justly conclude that something's broken in the way the state collects and disburses its revenues.
OK, so that's not exactly a secret. The state is $240 million short of paying its bills in the current biennium, and as much as $900 million to $1 billion behind in the next. But it's not because revenues have fallen short.
It is instead an overspending problem, which is easily seen from the fact that state spending grew from $3.6 billion a year in 1996 to $5.3 billion today. That's a 67 percent increase in six years, while inflation and average incomes ran about 20 percent. Spending dug the hole we're in.
Back to the initiatives: You can differ about the wisdom of the various proposals, and I have my own views of each of them, but when voters see signature gatherers from the Maine Municipal Association elbowing for space at the polls Nov. 5 with people seeking names for Carol Palesky's third try at a property tax cap, people who haven't paid attention to the creaks and wheezes of the current system might get interested.
To recap: Palesky's group, the Maine Taxpayers Action Network, wants strict limits on what towns and cities can raise from local real property. Their proposal has been discarded twice by the Secretary of State's Office for problems with signatures (which Palesky strongly disputed, but the courts disagreed).
It would cap property taxes at 1 percent of full valuation. That is, a house valued at $150,000 could not be taxed more than $1,500. Such a rate would be quite low for Maine, where tax rates grew by 8 percent in 2000 and likely by the same percentage or more last year and this.
There's more: Palesky's plan would only allow annual increases of 2 percent - that is, $30 on that $1,500 bill mentioned above - and only permit revaluation when the property was sold to a non-family member. If it passes, some small towns might not notice, but many towns would see a revenue drop of up to 50 percent - even more in some large cities.
You say that's a bad thing? Municipal officials would agree, for sure.
So, the MMA devised a different plan, one with substantial fiscal implications that have nothing to do with lowering tax rates. As noted in the Sept. 19 issue of the association's newsletter, "Impact," the initiative "directs the Legislature in statute to pay 55 percent of all defined K-12 education costs, as well as 100 percent of all special education costs" (the latter is an unfunded federal requirement).
The 55 percent figure conforms to a state pledge to fund local education costs at that level, a goal the Legislature has never met. Though the percentage has been higher in the past, it's now running about 42 percent.
Ah, but there's more: "MMA's proposal is notable not only for what it suggests, but for what it omits. . . . MMA's petition does not identify new revenue sources sufficient to meet additional state education funding requirements (estimated to exceed $200 million a year)."
That's OK, though, because "the petition directs the Legislature to examine a variety of 'revenue-neutral' options sufficient to pay for increased educational funding."
Hmmm. Might there be a tiny problem here?
The MMA plan demands $200 million more be spent on education while offering only encouragement not to raise taxes. Who at the MMA thinks legislators will cut other spending that much? Right. I guess that's an "impact," sure enough.
Finally, a group called Citizens for a Strong Maine Economy (linked with the "Billion-Dollar March" that drew about 350 people to the State House Sept. 14) wants to start gathering signatures for a measure that would copy a Colorado law.
There, a Republican governor has achieved what many might think of as a fiscal nirvana: a balanced budget, surpluses returned to the taxpayers in billion-dollar lots, and high ratings for efficiency and planning - all at a time when Maine and many other states are scraping by.
You see, Colorado has a limit not on taxes but on spending: Outlays can only rise in proportion to increases in the state's population and citizen income. Some folks here are saying it would put a lid on the overspending that has left Maine in the fiscal lurch.
What happens if the first two pass? Communities get a lot less money, and while some of it would be returned in additional educational aid, Mainers would likely see sales and income taxes climb by as much or more than their property taxes fell.
If only the MMA proposal passes, the upward ratchet would be intense, because there is no way our Legislature, at least as it is currently configured, would cut other programs by anything near $200 million.
But the spending cap? Ah, there's a petition fiscally responsible people can hug like a cuddly kitten.
- M.D. Harmon, an editorial writer and editor, can be reached
or 791-6482.
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