AUGUSTA – While the “historic” property tax relief bill was passed Thursday just in time to avoid another November referendum, it was not passed with broad support from both parties.
The bill passed 89-53 in the House, 23-11 in the Senate. Democrats endorsed the plan that came from Gov. John Baldacci and earned broad support from the bipartisan Property Tax Reform Committee, but most Republicans rejected it.
Rep. Robert Berube, R-Lisbon, and Rep. Randy Hotham, R-Dixfield, may have been the only Republicans from Oxford, Franklin or Androscoggin counties who voted for it.
While the AARP, the Maine Chamber of Commerce, and the Coalition for Reasonable Tax Relief praised the plan Thursday as “historic” and an “essential first step” to reducing taxes, Republicans complained there’s not enough relief in the bill.
Others pointed out that no one understands the new Essential Programs and Services education funding formula. Rep. Joan Bryant-Deschenes, R-Turner, insisted that small rural schools will be hurt. “The bill divides Maine” pitting small schools against large ones, she said.
Bryant-Deschenes voted against LD 1 “because we’re not providing tax relief.” She predicted that homeowners will be angry when they look at their property tax bills later this year and not find them smaller.
Sen. Lois Snowe-Mello, R-Poland, said she opposed the tax relief bill because there are 300 schools that will be losing money.
“And I don’t like the shift in the Homestead Exemption.” The state has reimbursed municipalities for all of the exemption given to homeowners. LD 1 raises the property tax exemption from $7,000 to $13,000, but the state will only pay for half. “Towns have to pick that up,” Snowe-Mello said. “To me that tells me it’s an automatic tax increase.”
Sen. Chandler Woodcock, R-Farmington, said his biggest objection was a “flawed” school funding formula. “It’s curious that we just passed a joint order that admitted the formula is flawed.” But the bill passed has that formula in it, Woodcock said.
Area Democrats sharply disagreed, saying the bill will lower taxes now and in the future through spending caps designed to prevent all levels of government from increasing spending more than incomes.
Lots of people are nervous about the new school funding formula, acknowledged Rep. Sonya Sampson, D-Auburn, who chairs the Androscoggin Caucus. Sampson said that more details on the formula will soon emerge. “I’m convinced this is just a skeleton version and we can add layers on if we need to.”
Sampson called the overall package “the best thing for Maine,” saying it provides relief. She said she is pleased with the expanded Circuit Breaker and Homestead Exemption programs that will provide more help to more homeowners.
Sen. Peggy Rotundo, D-Lewiston, said legislators have done what voters asked.
“The taxpayers of this state have been clear from what they want the Legislature to do,” Rotundo said. “They want more funding for public schools. They want property tax relief, they also want controls on state spending. LD 1 provides that for taxpayers.”
Rotundo opposed a proposal to increase the state share of education to 55 percent in two years – instead of four as LD 1 calls for – because that would cost $90 million that Maine doesn’t have. The only way to find that money would be to raise taxes or cut services to the elderly and disabled, she said.
“We have to do what’s fiscally responsible,” said Rotundo, who co-chairs the Appropriations Committee. “Like a family that needs to stay within its budget, we can’t spend money we don’t have.”
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