Other states have had mixed results with similar laws.

PORTLAND (AP) – A citizen initiative to cap municipal property taxes in Maine to 1 percent of a property’s total value is similar to laws in other states, which have shifted the tax burden rather than eliminate it.

Maine voters will decide whether to enact the Maine Tax Action Network’s plan next November, or possibly in June.

In other states, tax caps have accomplished one goal – preventing low-income people from being taxed out of their longtime homes – by providing tax breaks to those who live in neighborhoods where property values are appreciating rapidly.

But in Minnesota, which limits assessment increases, the law did not slow government spending, said Lynn Reed, executive director of the nonpartisan research group Minnesota Taxpayers Association.

Minnesota’s caps have instead forced the government to shift from the property tax to other revenue sources, such as fees or other taxes, Reed said.

California’s 26-year-old

Proposition 13, which launched a national tax revolt and served as a model for Maine’s initiative, has had a profound effect in that state.

Municipalities in effect lost the power to tax themselves and California’s legislature took over the job of funding public schools. Reed said many people got to pay lower taxes than they otherwise would have, but others ended up paying more.

Florida’s law, which also limited assessment increases, has shifted taxes onto properties that increased in value more slowly and were generally in poorer and less desirable areas, according to Reed.

A 1998 state study in Florida showed that 43 percent of the tax savings attributed to the state’s “Save Our Homes” assessment cap went to 16 percent of the homeowners, primarily those in well-to-do, high-end coastal properties.

Besides limiting municipal property taxes to 1 percent of a property’s total value, Maine’s initiative would roll back property assessments to their levels in 1997 and cap annual increases in value at no more than 2 percent.

The tax rate could be increased to cover a community’s payments on both existing debt and future debt approved by two-thirds of voters.

State officials estimate that the combination of capping assessments and the tax rate would remove $700 million from municipal revenues.

To make up the reduced property tax income, the sales tax would have to nearly double, according to a study by Charles Colgan, professor of public policy and management at the University of Southern Maine’s Muskie School.

Out-of-state owners of vacation homes and the owners of commercial real estate would enjoy the same tax breaks under the Maine proposal.

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