AUGUSTA (AP) – As property tax relief advocates try to build support for a special panel’s plan, an outside analysis commissioned by business groups asks if the focus of the politically charged effort in the Legislature is too narrow.

“While Maine’s property tax levels are high relative to personal income on a national basis, the report also finds that Maine residents and businesses face high personal income and business income tax burdens,” said a summary of the analysis prepared for the Maine Business Association Roundtable.

“It is unclear given these high other tax burdens that Maine most improves its tax system by concentrating all tax relief in the property tax, as under the governor’s proposal.

“A broader, more comprehensive tax reform effort would likely result in a more competitive and efficient tax system for Maine, providing a tax system that enhances job opportunities and increases the income of Maine residents,” said the analysis by the National Economic Consulting practice of PricewaterhouseCoopers.

The analysis done for the roundtable, a coalition of about 25 business organizations, was released Thursday, one day ahead of what is expected to be final voting by the Legislature’s 15-member Joint Select Committee on Property Tax Reform.

The committee split 12-3 Monday night in favor of a reworked version of a wide-ranging measure submitted by Gov. John Baldacci to boost state aid to schools as a way to relieve upward pressures on the property taxes levied by municipalities.

A Friday morning committee session is planned to allow panelists to review a legislative draft that, if approved again, would be forwarded to the full Senate and House of Representatives for consideration next week.

The three-member committee minority favored accelerating the so-called school funding ramp-up to hike the state share of local school costs to 55 percent over two years, rather than four years.

Beyond increased school aid and provisions for discouraging higher government spending, the special committee’s recommendations to the full Legislature also build on Baldacci’s original proposals for direct property tax relief, in part through a more generous income-based subsidy program.

As proposed, maximum benefits in the so-called circuitbreaker program would go up from $1,000 to $2,000. Families earning up to $100,000 would be eligible for the program.

The committee is also eyeing a near doubling of a Homestead program to make all Maine homeowners eligible for a $13,000 exemption, with the state and municipalities splitting the costs.

The House chairman of the joint select committee, independent Rep. Richard Woodbury of Yarmouth, said he did not anticipate significant change in the panel’s sentiments at Friday’s session.

Democratic Rep. Edward Dugay, D-Cherryfield, meanwhile, said addressing property taxes – which have been a target of complaint around the state – would be just a first step for lawmakers.

“The whole focus all along … has been to first focus on property tax reform and then next is income tax reform,” he said.

For the time being, some lawmakers suggest, the key school funding component of the proposed property tax relief package may promote voting on a regional rather that philosophical basis, with lawmakers weighing the measure in part by how well it would treat local school districts.

David Clough of the National Federation of Independent Business and one of the roundtable leaders in promoting the tax analysis, said the study could aid policy makers in both the debate on a property tax relief package and thereafter.

It “also has relevance to discussions that will take place throughout the session,” he said.

AP-ES-01-13-05 1715EST

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