AUGUSTA (AP) – Stepping up his criticism of a referendum proposal to force more state aid to local schools, Gov. John Baldacci said Thursday he has a revised plan to do the same over time while giving state residents real property tax relief.

The main new wrinkle, he said, would be to impose on cities and towns the same sort of spending restraints that the state adopted for itself this year.

Baldacci said that would entail caps on spending growth, and could accompany other steps to phase in a boost in the state’s share of local education costs to 55 percent over five years.

New state budget legislation establishes a cap for future budget proposals linked to a 10-year rolling average of real personal income plus inflation.

A referendum proposal to require a higher state contribution for local school costs is slated for a statewide vote in November.

Advocates say they were driven to advance the citizen initiative after years of state inaction. Critics say the proposal would pose a fiscal 2005 cost for state government of more than $264 million.

“It promises something but it doesn’t say how it’s going to be delivered,” Baldacci said, adding that he still hopes to win legislative approval before the end of next month to put a competing measure outlining his idea on the same November ballot.

Baldacci conceded that the revised package he is promoting – calling for a basic funding threshold for individual school systems, a repeal of the personal property tax on business equipment and curbs on local government spending – would not go far enough for some proponents of a major tax system overhaul.

“Do I win the discussion about tax reform in the theoretical sense? No,” the governor said.

But Baldacci continued to maintain that the delicate state economy ought not to be stressed by more far-reaching changes.

The primary goals, he said, should be appropriate levels of education funding and property tax relief.

“We want a bipartisan consensus,” Baldacci told reporters as talks continued with leaders of the Democrat-controlled Legislature, suggesting that a special session for lawmakers in August was possible.

The presiding officers of the Senate and House of Representatives said they were open to discussion and hopeful that various parties could reach agreement on a tax reform or tax relief plan.

“It’s my intention to poll the caucus, hopefully at some point next week,” said Senate President Beverly Daggett, D-Augusta. To this point, within flurries of legislative action on numerous issues, she said Senate Democrats had not fully assessed various tax options.

Noting persistent interest in some quarters for addressing the so-called volatility of Maine’s tax system, Daggett added, “I’m not sure I’m ready to completely close that door.”

House Speaker Patrick Colwell, D-Gardiner, said he too was sympathetic to desires for a fundamental tax system restructuring and that proposals in that vein should not be ruled out.

“It may not be possible,” but could be up for consideration, Colwell said.

Tax system changes that would raise new revenue have been anathema to some lawmakers and Baldacci has been cold to the notion as well.

Before this year’s regular legislative session adjourned last month, Democrats and Republicans split on two versions of Baldacci’s original fiscal reform proposal.

Both versions sought to boost the state’s share of local education costs to 55 percent, as proposed by the citizen initiative backed by the Maine Municipal Association.

Both also envisioned an end to the personal property tax on business equipment, and both would have encouraged consolidation and cooperation among municipalities and county government.

Over Republican opposition, the Democratic majority’s plan would allow local option sales taxes. The majority plan would also expand the circuit-breaker property tax relief program and maintain homestead exemptions.

In his informal session with reporters Thursday, Baldacci said he also remained interested in talking more with lawmakers about a new state borrowing package.

AP-ES-07-10-03 1714EDT



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