By Glenn Adams,Associated Press Writer

Overhaul plan moves to Senate; debate continues

AUGUSTA – A sweeping bill calling for state and local government spending curbs and broadened tax-relief programs won preliminary House approval Wednesday night and was sent to the Senate, where debate is to continue.

Representatives rejected 10 amendments offered on the floor through the afternoon and evening before approving the bill, which had won the strong support of a bipartisan tax reform committee that reworked it for weeks leading up to the vote.

The House voted 89-53 in favor of the bill before sending it to the Senate, where more amendments are expected to be offered today.

Gov. John Baldacci’s tax relief measure, strongly supported by his fellow Democrats, also drew some Republican support.

House Minority Leader David Bowles of Sanford said the bill creates false expectations among taxpayers and allows spending caps to be overridden too easily. But the Republican said he would vote reluctantly for the bill because “it’s a beginning.”

Earlier in the day, Baldacci urged quick legislative action. Leaders set a Thursday deadline for final action, with hopes the governor would sign it into law that night.

“We’ve got to get it done now,” the Democratic governor told dozens of senior citizens at an AARP rally in the State House. “That’s why I made this the first issue” of the 2005 session.

Baldacci’s bill seeks to roll back property taxes, which many residents say have shot out of control, through a combination of spending caps at the state, county and local levels of government and expansions of Maine’s so-called circuitbreaker and Homestead tax relief programs.

In addition, the bill calls for an increase in the state subsidy to public schools from a little over 40 percent to 55 percent over a four-year period.

Among the amendments shot down by the House Wednesday was one calling for a two-year ramp-up in the education subsidy. Supporters said that’s what voters expected when they supported a citizen-initiated referendum seeking the school funding hike as a way to put the brakes on local taxes.

Opponents have maintained the state cannot afford the added cost of speeding up the funding increase.

Another amendment sought more study on how school funding changes would affect communities. Its sponsor, Rep. David Trahan, R-Waldoboro, said the bill creates funding disparities between urban and rural, and rich and poor districts.

“Bad legislation is often rushed legislation,” said Rep. Kenneth Lindell, R-Frankfort.

Rep. Richard Woodbury, an independent from Yarmouth and House chairman of the tax study committee, said the bill delivers the property tax relief voters demanded when they approved the Maine Municipal Association-backed initiative last June.

A separate, more extreme proposal to cap property taxes at 1 percent of assessed value was defeated at the polls in November. The two initiatives sent strong signals of taxpayer discontent to Augusta, putting pressure on the Legislature to respond quickly and decisively.

An analysis by Maine Revenue Services says taxpayers can expect to pay an average of $207 less in property taxes if the bill in the Legislature becomes law. The same study says savings could amount to $314 for a married couple with two children, and $882 for a single elderly homeowner.

The House set aside for votes Thursday a bill calling for a statewide referendum on whether to increase Maine’s 5 percent sales tax by a half cent to pay for an increase in school subsidies over a two-year period. The bill, if approved by voters, would also extend the sales tax to amusements.

AP-ES-01-19-05 2034EST

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