Environmental bonds should not detract from needed funding for transportation.

In recent weeks, there have been many stories printed concerning the Legislature’s and governor’s efforts to agree to tax reform and bond packages for voters to consider at the polls on Nov. 4.

As leaders of the House and Senate Republicans, we have engaged in numerous meetings with the governor and our Democratic colleagues on these issues and are hopeful that we will reach an agreement by the time the Legislature gets back in session by late-August, the deadline the Secretary of State has established in order to allow adequate time to get the ballots printed and distributed to Maine’s municipalities.

With respect to tax reform, lawmakers have been meeting for months in an attempt to reform and stabilize Maine’s tax code. Their goal is to craft a proposal that offers voters an alternative to the incomplete plan put forth by the Maine Municipal Association. MMA’s plan talks about property tax relief but in reality mandates that the state raise an additional $260 million to pay for this fictional property tax break. MMA’s plan will inevitably result in significant across the board tax increases at the state level. Hardly a plan that any sensible person would consider relief.

The Legislature’s Taxation Committee has done some good work this session trying to arrive at a compromise but has had a difficult time reaching consensus. Their proposals have evolved from some early suggestions to expand the sales tax to food, electricity and heating oil to more sensible approaches that force the state to fund 55 percent of essential education programs and services while compelling municipalities to keep their spending in line. The governor prefers a plan that contains many of the key components touted by the Republican members of the Taxation Committee.

The governor is trying to gain the support of Democratic leadership for a plan that phases in an increase of the state’s share of education costs to 55 percent while imposing spending limitations on local governments. At the end of the day, the burden on the municipality to fund essential education programs and services will be diminished, allowing them to offer relief to their property taxpayers. Most importantly, this is accomplished without raising taxes at the state level. It is a win-win situation. Hopefully, our colleagues in Democrat leadership will heed the governor’s call so we can bring the Legislature back to Augusta to deal with this matter quickly.

The state’s bond negotiations have taken a different path. At varying times over the past couple of months, there has been widespread agreement over a bond package that will satisfy the state’s transportation needs – a Republican priority – while also addressing needs at our university and community college systems. As Republican leaders, we feel that it is prudent to cap this year’s bond proposal at about $83 million. This amount, coupled with $60 million worth of bonds already approved by the voters in June nearly equals the amount of bonded indebtedness the state is slated to retire this year. However, the Senate Democratic leadership has time and again resisted a fiscally prudent bond package and is pushing for a more expensive $93 million package that includes environmental bonds. Currently, the state has more than $60 million worth of environmental bonds that have been authorized but remain unissued. Given that reality, there seems to be no urgency for issuing more environmental bonds at this time. Tough decision-making and cuts in state government have contributed to the recently announced surplus of $33 million to close our most recent fiscal year. Therefore, it only makes sense to keep our newly issued bond amount to a prudent figure. Now is not the time to take steps backward by increasing borrowing.

Governor Baldacci is aware of the fragile nature of our economy and has made great strides in attempting to broker a sensible and fiscally prudent plan for tax reform and for limiting our bonded indebtedness. We are optimistic that he will be able to convince our Democratic colleagues that Maine cannot afford an unreasonable level of state borrowing or tax increases.

Paul T. Davis is Senate Republican Leader; Chandler Woodcock is assistant Senate Republican Leader; Joe Bruno is House Republican Leader; David Bowles is assistant House Republican Leader.

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