Tax relief and budget-balancing will be addressed when the House and Senate reconvene.

AUGUSTA (AP) – Gov. John Baldacci and House Speaker Patrick Colwell said separately Friday they could at least consider a key Republican desire in the debate over fiscal affairs.

Baldacci and Colwell both suggested Democrats were willing to talk about some type of constitutional limitation on government spending as a way to foster a spirit of bipartisan cooperation.

“We should have that discussion,” Baldacci said, stopping short of committing himself.

Colwell, too, was restrained.

“I have not dismissed it,” the Gardiner Democrat said, adding that a constitutional amendment would be a hard sell for some Democrats.

“There’s a high threshold there,” Colwell said.

Legislative Democrats, who hold the reins at the State House, are still divided over proposals for property tax relief. The Democratic governor seemingly has been closer in his position to that of his allies in the House than to that of his party colleagues in the Senate.

The House and Senate will reconvene Tuesday after a 10-day break to take up tax relief, budget-balancing and new state borrowing.

Baldacci, saying he saw opportunities for bipartisan dealmaking, has been urging a sequential approach with passage of a budget bill coming first.

Legislative Republicans put forth a policy statement on taxes and spending in February. Included was a proposal to amend the constitution to limit spending by a formula based on inflation and population growth.

Touting new curbs on state budget proposals, Baldacci has argued for similar standards for local governments as part of any effort to ensure that local property taxes are eased.

On Friday, he reiterated his opposition to a plan that has been advanced by Senate Democrats that would fund property tax relief initiatives with revenue from a 1-cent hike in the state sales tax.

Colwell, meanwhile, continued to advocate another proposal that would use new revenue from so-called sin taxes – perhaps relying on a 75-cent hike in the cigarette tax, he said.

The new revenue, he said, could help boost local school aid and expand current property tax relief programs.

While rank-and-fi le lawmakers have had the week off, some legislative leaders have been consulting over major issues still standing between the Legislature and its adjournment.

“We must pass a budget this week,” Colwell said, echoing the governor in looking toward the Legislature’s remaining chores. “I certainly agree.”

There too, however, lingering disagreements among Democrats remain.

Baldacci said Friday the administration was concerned about Wall Street reaction to a proposed debt restructuring worth about $8 million that the Senate endorsed unanimously a week ago as a way to raise additional compensation funds for victims of abuse at the Baxter school for the deaf.

A pair of referendum questions dealing with property tax relief are already slated to go before Maine voters.

A proposal backed by the Maine Municipal Association, which seeks to make the state pay 55 percent of funding for public education immediately, failed to get majority support at the polls in November but is scheduled to reappear on the ballot in June.

Another initiative championed by anti-tax advocate Carol Palesky would cap property taxes at $10 per $1,000 of assessed value, based on values in 1996-97. It also would limit assessment increases to 2 percent a year while the property’s ownership remains in a family.

A state supreme court majority said last week it appeared that part of the initiative would run afoul of a constitutional provision requiring property taxes to be based on fair market value.

In an op-ed piece published Friday in the Bangor Daily News, Senate Minority Leader Paul Davis blasted Democratic fiscal policies.

“Maine’s Legislature has a spending problem, not a revenue problem. … This majority party and this governor need to be held accountable for the ever-increasing tax burden being forced on Maine people,” the Sangerville Republican wrote.

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