All Maine Matters
Because All of Maine DOES Matter!
Vol. 1, No. 9 September 2006 FREE
TABOR Will Terminate Tax Relief Scams
by Senator Paul Davis
Let's say you bought a horse, and every time you tried to ride it the thing bucked you off and then bit you. Would you keep it, or would you trade it for a friendlier animal? This question faces Maine voters every election cycle. Each time, they hear the same promise of coming tax relief, only to get the heave ho and a good chomp on the behind.
It is time for a change, and that change is the Taxpayers Bill of Rights, or TABOR. In 2004, if you recall, Maine was in the midst of a full-blown revolt over property taxes. The Palesky tax cap initiative was on the ballot, and politicians and municipal officials were predicting an apocalypse. If it passed, we were warned, life as we knew it would end. Those dire predictions, plus a promise from Governor Baldacci to put forward a plan of his own, were enough to buy politicians' time. But the tax revolt was still simmering just beneath the surface.
At the same time, voters passed the Maine Municipal Association's initiative to require that the state pay 55 percent of the cost of K-12 public education. All the stars were aligned for state leaders to step up and deliver desperately needed-tax relief and prove they were listening to Maine people.
What happened over the next two years can only be described as a failure on the level of the 1986 World Series blunder by Boston Red Sox first basemen Bill Buckner.
In January of 2005, the Legislature and Governor Baldacci delivered on their plan to reduce property taxes. LD 1, "An Act to Increase the State Share of Education Costs, and Reduce Government Spending at all Levels," was passed. There were several components to LD 1 that, in theory, should have cut property taxes. The most prominent were spending caps, a four-year ramp up of education funding, and the expansion of two property tax relief programs - the circuit breaker and the Homestead Exemption.
Upon passage of LD 1, politicians were high-fiving each other in a kind of victory festival. On January 2, 2005, in the Portland Press Herald, Governor Baldacci himself proclaimed "a historic moment for the people of this state"
Newspapers reported taxes would fall by over $200 per household. In an op-ed piece dated January 17, 2005, the architect of LD 1, Martha Freeman, director of the State Planning Office, wrote, "Overall, the governor's proposal and the committee work permit an 8 percent reduction in the property tax burden for Maine residents in the first year - with more to come." To quote Dr. Phil, "How's that workin' for ya?"
Within months it was obvious LD 1 was a complete fraud. Newspaper headlines said it best. "Officials: Tax relief solution "pathetic" (Bangor Daily News, February 14, 2005). "Dexter manager says tax relief plans a scam" (BDN, February 19th, 2005). Phippsburg Selectmen Michael Rice said, "It's a sham" (Times Record, March 24, 2005). The Courier Gazette, of Rockland, warned, "Don't be fooled. What is being touted by many politicians and the governor as Maine's first step in 'meaningful' tax reform is little more than a sham."
LD 1 failed for several reasons, but the most obvious is the Legislature's lack of will. Almost as fast as the politicians were lining up for photo ops and back slapping, special interest groups were shredding the legislation.
Education lobbyists balked at the notion that the new $250-million in education money would be directed at reducing property taxes. That critical component of the legislation - indeed, the very reason for the legislation - was quickly scrapped. State government budget writers feverishly drafted legislation that used clever accounting gimmicks to exempt several big ticket programs from the new "spending caps." The Legislature's own Office of Fiscal and Program Review calculated that in 2006, when all spending gimmicks were accounted for, the Legislature exceeded its own spending cap by $108 million.
Finally, as one last chomp on the backside, selectmen and municipal officials from across the state were told that in order to pay for the expansion of the Homestead Exemption they had to raise property tax mill rates by $35 million. Yes, that's right - raise property taxes to give a property tax rebate.
Do not despair. The Taxpayers Bill of Rights will end this vicious cycle and restore Maine to its rightful owners - we the people. The TABOR legislation contains spending caps that are fairly applied to all levels of government. No longer will Augusta politicians have the freedom to hide spending. The easy road that allows the governor to raise taxes and fees will have a stop sign that says: "Whoa boy! If you wanna raise taxes, you're gonna have to get the taxpayers' permission."
Adios to the days when the citizens of this state felt hopeless and frustrated as they watched their paychecks disappear, as they watched senior citizens taxed out of their homes. Perhaps finally, in the most savagely taxed state in the nation, we'll see genuine tax relief.
Senator Davis (R-Sangerville) is in his fourth term and represents many towns and unorganized territories in Piscataquis County, and parts of Penobscot and Somerset Counties. Prior to his legislative service, he worked for the Maine State Police, retiring after 23 years. He serves as the leader of the Senate Republican caucus. Senator Davis is a graduate of the University of Maine and is involved with the local Kiwanis club in his community. He and his wife of 36 years, Patricia, have two children: Paul Davis, Jr. and his wife Rachael, and Heidi Dow and her husband Guy. Senator Davis and Patricia have four grandchildren.