AUGUSTA (AP) – A pair of new property tax reform proposals have surfaced in the State House barely a day after activist Carol Palesky’s 1 percent tax cap initiative got the go-ahead to appear on the November ballot.

On Wednesday, a coalition of senior citizens’ groups and tax reform activists unveiled an alternative they dubbed “Homestead Plus,” which would limit property taxes to 5 percent of family income and provide $75 million in direct relief.

The plan also seeks to send refunds directly to taxpayers, not to municipalities, said Arn Pearson of the Maine Citizen Leadership Fund. The $125 million package would be funded by either a penny increase in Maine’s 5 percent sales tax, or by expanding the sales tax base.

Pearson said Homestead Plus plan is a realistic alternative to Palesky’s initiative, which he labeled “junk food reform” that forces people to choose between their homes and schools.

The proposal was unveiled a day after House Speaker Patrick Colwell, D-Gardiner, presented his bill to combine Maine’s Homestead and Circuit Breaker tax relief programs and send refund checks directly to taxpayers.

In presenting his bill to the Taxation Committee on Tuesday, Colwell said those who qualify will get an average reimbursement of 15 percent of their property taxes.

Colwell said he and Gov. John Baldacci “are working together to find the money to fund” the tax proposal.

Both Colwell and Pearson said they are open to changes in their separate proposals, and supporters of both bills expressed confidence a meaningful relief bill can be passed in the remaining weeks of the legislative session.

The measures appear after Monday’s ruling by state elections officials that an initiative campaign led by Palesky and her Maine Tax Action Network had collected a sufficient number of voter signatures to put their proposal before voters next November.

The initiative has generated deep concern in the State House because of its potential impact on municipal budgets. Palesky plays down those fears, saying Mainers have been overtaxed for too long and at least 20 other states have taken an approach similar to hers.

But a critic of that plan, Christopher St. John of the Maine Center for Economic Policy, said the tax cap approach has wreaked budgetary havoc elsewhere, notably California. He said it sounds appealing at first but its pitfalls soon come to light.

“If it sounds too good to be true, it is to good to be true,” said St. John, whose group advocates for low-income Mainers. Also supporting the Homestead Plus plan are AARP, which claims 200,000 Maine members, and the Maine Council of Senior Citizens.

St. John said the Homestead Plus plan is also an answer to an initiated proposal that appeared on last November’s ballot. The Maine Municipal Association’s proposal sought to require the state to pay 55 percent of funding for public education from kindergarten through 12th grade.

The initiative failed to draw support of more than half of the voters, so the MMA-backed question is now scheduled to appear on the June 2004 ballot.

Legislative leaders have discussed the possibility of putting both the MMA proposal and Palesky’s proposal on the June ballot.

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