Maine voters nix beverage tax, putting some on edge

PORTLAND, Maine - After a couple of failed attempts, tax foes finally mustered a victory in a statewide referendum to rein in taxes in Maine.

With the beverage tax abolished Tuesday, voters next will possibly face two more tax-related referendums on Election Day a year from now. For lawmakers, it's an ominous sign as they face a budget shortfall of at least $500 million for the coming two-year cycle.

Republican state Senator Peter Mills of Cornville said the tax repeal, along with the narrow victory for water bonds, serve as a scene-setter.

"It sends a signal at this point that no form of [new] revenue is appropriate, and maybe that's the way to start this session right," he said.

State Senator Joe Perry, cochairman of the Taxation Committee, agrees that there's a sense of foreboding.

"I don't know how we get out of this without looking at revenues, or hitting the rainy day fund, or cutting spending, or all three," the Bangor Democrat said.

For all the uproar over Maine's tax burden, Mainers failed to enact a referendum to cap property taxes in 2004 and two years later rejected a so-called Taxpayer Bill of Rights aimed at limiting government growth by tying spending to the inflation rate.

Ted O'Meara, spokesman for the Fed Up With Taxes coalition, said those referendums raised public expectations, but there were no tax breaks.

Voters apparently decided enough was enough when lawmakers seeking funding for a health initiative enacted a new tax on beer, wine, and soda, as well as on an assortment of other beverages.