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Two November referendums target taxation in Maine

Questions seek to reduce state, local spending

By Glenn Adams
Associated Press / October 12, 2009

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AUGUSTA, Maine - Antitax fever, which inspired unsuccessful Maine ballot initiatives in 2004 and 2006, is back again, with activists determined to scale back taxes, this time with a pair of questions for the Nov. 3 ballot.

Question 2 is aimed at automobile excise taxes, which can run into the hundreds of dollars, and Question 4 is a now-familiar appeal to further curb state and local spending and taxes.

Municipalities and other public institutions that depend on those taxes are urging voters to retain the status quo and vote down the questions, which were written by the conservative Maine Heritage Policy Center.

Promises of lower taxes appeal to voters like Tim Poitras of Caribou, but the possible impact leaves him skeptical.

“I personally don’t like paying more taxes,’’ Poitras said. But he said he is concerned about the potential loss of local tax revenues that would result if Question 2 passes.

“If I had to vote today, I would probably vote against it,’’ he said last week.

Poitras sees some advantages to Question 4 at the state level, although he said he’s voted against similar proposals in the past. He does take issue with spending curbs that would apply at the town level, saying they would take away local control.

“Let every town choose on their own, Poitras said.

Question 2 seeks to cut the municipal excise tax rate by an average of 55 percent on motor vehicles less than 6 years old. It would also exempt new or leased hybrid and other alternative-energy and highly fuel-efficient motor vehicles from the sales tax and three years of excise taxes.

Excise taxes, which must be paid at the time a vehicle is registered, are highest for new vehicles.

For example, a person registering a 3-year-old car valued at $19,500 must pay $263.25 under the present formula, according to Maine Revenue Services.

The More Green Now campaign said the curbs would save Maine taxpayers $80 million each year - a savings for individuals of nearly $1,000 in taxes over the lifetime of a car. It also said the proposal promotes cleaner air and greater fuel efficiency.

Chris Cinquemani, campaign chairman, explained the campaign’s name.

“If the green that you want is in your pocket, that’s what you’ll get,’’ Cinquemani said. “If the green you want is cleaner air and energy efficiency, that’s what you’ll get, too.’’

But the Maine State Chamber of Commerce and other opponents, under the banner of Citizens Unified for Maine’s Future, say the state’s communities need that $80 million to plow, build, repair, and maintain more than 13,000 miles of local roads and 800 bridges. Municipalities can apply excise taxes they collect to the town budget, and typically, the revenue is spent on road maintenance, construction, and repair.

The excise tax cut is being proposed as many municipalities find themselves cash-strapped and forced to make budget cuts. The small city of Gardiner said it would lose $250,000 next year if the question is approved.

Gardiner, population 6,200, and other municipalities have passed resolutions opposing the referendum.

Opponents also say passage would result in a tax shift. Owners of new cars would enjoy tax breaks, but the savings would result in higher property taxes and poor road conditions.

Question 2’s opponents called on tax foes like state Senator David Trahan, Republican of Waldoboro, who said its passage “will trash local government needs. We need to reform the excise tax, but I have serious concerns about this proposal.’’

Question 4 seeks to change the formulas that limit state and local government spending by holding state spending to the rate of inflation plus population growth.

The Legislature and voters would have to approve any spending over state limits or increases in state taxes, and local voters would have to approve any spending above municipal and county limits.

The referendum proposal is widely known as TABOR II, after a similar Taxpayer Bill of Rights proposal that voters rejected 54 to 46 percent in 2006. Two years earlier, Mainers turned down by a roughly 2-to-1 margin a proposal to limit property taxes to 1 percent of assessed value.

Proponents have calculated the average savings expected through TABOR II, but they say taxpayers would certainly wipe out “invisible’’ tax increases resulting from inflation.

The TABOR Now committee says spending and tax controls are needed to improve Maine’s ability to attract jobs and increase personal wealth.

Steve Bowen of the Heritage Policy Center, dismisses doomsday predictions by opponents and said TABOR II does not cut a single government program or any tax. All it does is give taxpayers more power on spending and tax issues, he said.

Opponents contend that TABOR II would establish rigid, one-size-fits-all spending limitations on state, county, and local governments.

They say the limits would result in the underfunding of secondary and higher education, health care, emergency and transportation services, and infrastructure repairs.

Citizens Unified for Maine’s Future, which opposes TABOR II, called it a disguised rehash of the proposal of two years ago, one that is pushed by out-of-state interests.

“Maine voters have repeatedly rejected this bad idea at the polls,’’ said Crystal Canney, communications director of the campaign. “What is it about democracy that these groups don’t understand?’’