Republicans, Democrats and the governor all have their own plans.
AUGUSTA – Tax relief is one of the big issues of the Legislative session, but with only seven weeks to go, lots of proposals to consider and a breakdown in talks between the governor and municipalities, it’s anyone’s guess what, if anything, will happen.
Lawmakers and groups representing schools, municipalities and consumers “are fragmented,” Gov. John Baldacci said Friday. “Everybody has their own ideas.”
Discussions between Baldacci’s administration and the Maine Municipal Association have failed, and the MMA and the Maine Education Association will now work toward passage of Question 1A on the June ballot, Baldacci said, adding he’s disappointed.
Question 1A would require the state to immediately start paying a greater share of local education costs.
Going without support from municipal leaders, Baldacci said he’ll introduce details of his property tax relief plan sometime next week.
He called his proposal “exciting” and said it will offer something for everyone: “immediate relief” to homeowners, elimination of business taxes and more money for education. But Baldacci’s plan will also call on towns and cities to regionalize, rein in spending and “stretch the dollar,” he said.
On Friday, House Speaker Patrick Colwell didn’t agree there’s a lack of tax relief consensus, saying House Democrats back his proposal to spend $40 million more a year for direct rebates to homeowners. However, his bill doesn’t have support of the governor or Republicans, who have their own plan.
Meanwhile, Baldacci said Friday he favors placing another tax relief proposal – Carol Palesky’s property tax referendum – on the June ballot instead of November. “I’ve not talked to leadership, but it makes sense,” he said.
If that happens, voters could face three tax votes this June:
• MMA’s question to mandate the state immediately start paying 55 percent of K-12 education costs to lower property tax burdens, which would cost the state $248 million a year. Baldacci and others have said that’s too much, too fast.
• Palesky’s Maine Taxpayers Action Network referendum, which would cap property taxes at 1 percent of a property’s assessed value, plus municipal debt. Critics have said the plan would cripple towns and cities.
• An as-yet unannounced competing measure to Palesky’s referendum. (The Palesky referendum does not compete against the MMA proposal. Voters could approve both.) Baldacci said he’s “heard talk” of another proposal still to be unveiled by legislators.
MMA officials acknowledged Friday that negotiations with the administration had broken down, but said they are now talking with a new legislative working group in hopes of reaching a compromise bill to Question 1A.
Talks with the administration failed because Baldacci did not offer specifics on how much more the state would spend on education each year, said MMA’s Geoff Herman.
Rep. Deborah Simpson, D-Auburn, who co-chairs the working group, said Friday she’s hopeful a consensus will be reached prompting MMA to withdraw support for Question 1A.
The group is currently considering having the state spend $40 million more a year on education, while asking municipalities to try to cap spending to the growth of personal incomes. The result would be property tax stabilization, Herman and Simpson said.
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