PORTLAND (AP) – After a couple of failed attempts, tax foes finally mustered a victory in a statewide referendum to rein in taxes in Maine.

With the beverage tax abolished on Tuesday, voters next will likely face two more tax-related referendums on Election Day a year from now. For lawmakers, it’s an ominous sign as they face a budget shortfall of at least $500 million for the coming two-year cycle.

Sen. Peter Mills, R-Cornville, said the tax repeal, along with the narrow victory for water bonds, serve as a scene-setter for the upcoming session.

“It sends a signal at this point that no form of (new) revenue is appropriate, and maybe that’s the way to start this session right,” he said. “It’ll give the Democratic majority great pause in terms of raising taxes to get out of this box.”

Sen. Joe Perry, Taxation Committee co-chairman, agrees that there’s a sense of foreboding following previous budget shortfalls that date to Gov. John Baldacci’s first term in office, when lawmakers had to close a gap of $1.2 billion.

Since then, there have been smaller shortfalls, including $190 million last year.

“I don’t know how we get out of this without looking at revenues, or hitting the rainy day fund, or cutting spending, or all three,” the Bangor Democrat said.

For all the uproar over Maine’s tax burden, Mainers previously failed to enact a referendum to cap property taxes in 2004 and two years later rejected a so-called Taxpayer Bill of Rights aimed at limiting government growth by tying spending to the inflation rate.

Ted O’Meara, spokesman for the Fed Up With Taxes coalition, said those past referendums raised public expectations that something was going to be done, but there were no tax breaks or major tax reform.

Voters apparently decided enough was enough when lawmakers seeking funding for Baldacci’s Dirigo Health initiative enacted a new tax on beer, wine and soda, as well as on an assortment of other beverages including flavored water, iced tea and lemonade.

Mainers rejected the tax by a nearly 2-to-1 margin on Election Day.

Without the new funding source, Dirigo will revert back to a controversial savings offset payment assessed on insurers that has sparked regulatory battles and court fights.

O’Meara said Mainers had a number of problems with the beverage tax. For starters, many were angered by the way the tax was adopted “in the middle of the night” near the end of the session, he said. More important, people are simply fed up with taxes, he said.

“You can’t separate this vote from the times we’re in. People are struggling to make ends meet. Prices of all sorts of things have gone up. You see it when you go to the grocery store, pay your heating oil bill or put gas in your car,” O’Meara said.

Perry said the beverage tax was repealed because “we’re not having an honest, realistic discussion about the taxing and spending needs.”

“I’ve got a conservative friend. He’ll call me all the time. He has two complaints. If we have a surplus, that’s all the proof he needs that we’re taxing too much. If we have a structural gap, that’s all the proof he needs that were spending too much,” he said.

The truth, Perry said, is that the ongoing budget problems have been caused by the weak economy instead of big government. When the economy droops, so do revenues, he said.

That said, Mills said the new legislature will have to confront the limitations of state government.

“It’s going to force us to look at efficiency and do something that we rarely do, which is evaluate the effectiveness of (existing) programs,” Mills said.

If they don’t, voters might weigh in, again.

Next year, voters are expected to get a shot at a revised version of the Taxpayer Bill of Rights. A separate bill would slash the auto excise tax by about 50 percent for the first five years the vehicle is registered, saving nearly $70 million a year.

AP-ES-11-07-08 1110EST

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