The plan, which would cap property taxes in the state at 10 mills or 1 percent, has serious flaws. In an advisory opinion, Maine’s Supreme Judicial Court has ruled that parts of the legislation are likely unconstitutional and some of the cap’s biggest supporters admit that there are problems that would have to be fixed if the initiative passes.
Put in the simplest way, if the tax cap is successful, cities and towns around the state would lose between $600 million and $700 million in revenue, most of which is dedicated to public schools. Service centers, like Lewiston, would fare the worst, but there would be plenty of suffering to go around. According to City Administrator Jim Bennett, Lewiston alone would lose about $40 million in revenue a year, more than half its budget.
To make up for the lost revenue, services – including police and fire protection, trash collection and snow removal – would be curtailed. Fees and other taxes would likely be raised to help localities balance the books.
Supporters of the tax cap justify such drastic measures as a way to slow the rapid growth of local government. They say threats to important social services are exaggerated and are being used as a scare tactic by cap opponents, hoping to intimidate voters by saying libraries and senior centers would be closed. But it is pure farce, willfully accepted by cap supporters, to believe that there is so much waste and inefficiency in local governments that they could afford to cut their budgets by 50 percent or more.
The tax-cap proposal is modeled closely after California’s Proposition 13, which led to a drastic reduction in local support for education, and hurt the state’s prosperity while leading to an unbalanced and unfair housing market that punishes people who move to the state. It created inequitable taxation and caused many of the financial problems that still mire the state.
Worst of all, the tax cap does not deliver on its promise. While most people would see a reduction in their property taxes, homeowners in areas with high valuations would get little or no relief. Meanwhile, those well-off enough to own expensive homes would watch as their tax bills are drastically reduced while people with more modest homes would receive less help. And about 20 percent of the benefit of the cap would go to out-of-state businesses and homeowners, and leave Mainers to make up the difference with other taxes and fees or to live without valuable programs and services.
The tax cap won’t necessarily help those who need the most assistance and will gut the ability of towns and cities to help the less fortunate, protect lives and property, and educate our children.
Earlier this year, Maine’s highest court offered an advisory opinion that said provisions in the tax cap that roll property values back to 1996-97 levels are likely unconstitutional. There are also problems with the legislation because it would require a two-thirds majority of voters in a general election to change the law. Essentially, the legislation seeks to pull the bridge up behind itself and make it nearly impossible for changes to be made.
Momentum for the tax cap began building when lawmakers in Augusta failed to address tax reform last spring. There were many ideas – some good, some bad – that addressed questions of both revenue and spending, but a consensus could not be built. Nothing happened. Voters can be excused for being angry, but the idea that voting for the tax cap will send a message to Augusta underestimates the serious consequences of passage.
Already, there has been movement to increase state funding for education, to encourage localities to consolidate their operations to save money, and efforts to increase the state’s Circuit Breaker program, which works by targeting property tax relief to the people who need it the most.
Catastrophe awaits passage of the tax cap, but the power to avert the disaster is in the hands of voters. They should exercise that power thoughtfully and cautiously.
Vote no on Question 1. Reject the tax cap.
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