AUGUSTA (AP) – Three-sided State House discussions are under way over options for promoting tax relief and tax reform while curbing state spending, according to executive branch and legislative sources.

Participants say preliminary discussions have focused in part on a possible state absorption of county jails as a way to ease local tax burdens.

On the tax side, based on sketches of the direction of the talks provided on a not-for-attribution basis, there appears to be residual interest in a yet unattained goal of a Taxation Committee majority to move a bigger share of state collections to nonresidents.

One way, some have argued, could be to increase or broaden the state’s 5 percent sales tax.

As to state spending, Gov. John Baldacci has insisted that tax reform should be twinned with spending reform.

To meet his expressed intent, the administration and the Legislature would have to find some way to go beyond the $10.1 million cost-cutting initiative being managed by the Appropriations Committee that is needed to keep the state’s new $6.3 billion biennial General Fund budget in balance.

Baldacci, a second-term Democrat who says he is closing out his career in elective politics, has recently brought leaders of both the Legislature’s Democratic majority and Republican minority in for consultations.

Since going back home nearly two months ago, House and Senate leaders have stopped in at the State House only occasionally.

In June, just hours after the year’s regular legislative session was adjourned, Baldacci said he hopes to follow the take-it-to-the-people model he credits for winning approval of a school system consolidation plan with a similar drive to promote tax reform, tax relief and government spending restraint.

“I want to continue the debate and the discussion,” Baldacci told reporters.

But his idea of timing remained unclear then and still does now.

Gubernatorial aides suggest that a special session this fall is not out of the question, but that a multi-part tax package, if such a concept shows promise for enactment, could also be developed for the 2008 regular session that begins in January.

The state Senate is expected to convene on Sept. 17 for a one-day confirmation session, but the House of Representatives would not have to meet for that reason.

The $6.3 billion budget for fiscal years 2008 and 2009 mandates sweeping changes in how school administrative systems have been organized for decades and is designed to increase the state’s share of basic local education funding to 55 percent while relying on about $130 million of savings to be taken in the Department of Health and Human Services.

The budget counts on a little more than $10 million in savings that have not yet been specified and the Appropriations Committee has asked state agencies to come forward with ways to meet the target.

The committee has also appealed to the public for advice, setting up a virtual suggestion box for savings ideas.

AP-ES-08-15-07 1504EDT

Copy the Story Link