Ready, set, campaign: Battle over TABOR heats up

QUESTION 1

"DO YOU WANT to limit the increase in state and local government spending to the rate of inflation plus population growth and to require voter approval for all tax and fee increases""

IF THE MEASURE is adopted, cities, towns and counties will have to base spending on rates of inflation plus population growth, or growth in property values, whichever is lower. School districts would be required to keep spending in line with inflation and enrollment rates. At the close of each fiscal year, 80 percent of any state surplus would be used for tax relief, 20 percent would be put in a fund for use if revenue ran short later.

TAX AND FEE increases would require a two-thirds' approval from the government body, such as a city council or town meeting. Those increases would then have to pass a majority vote by all eligible voters.Anti-Taxpayer Bill of Rightsn Larry Benoit, campaign director for Citizens United, former top aide to Edmund Muskie, George Mitchell and John Baldacci.n Dennis Bailey, president of Savvy Inc., public relations firm in Portland.n Christopher "Kit" St. John, executive director of the Maine Center for Economic Policy, a liberal think tank.The political action committee is called Citizens United, and can be found at www.notabor.org

WHO'S WHO: SOME OF THE KEY PLAYERS

Pro-Taxpayer Bill of Rightsn Mary Adams, citizen activist from Garland. She is the chief sponsor and led the signature drive.n Roy Lenardson, political strategist, former campaign director for gubernatorial candidate Peter Cianchette.n Bill Becker, president and CEO, MaineHeritage Policy Center, a conser-vative think tank.The political action committee is calledTaxpayerbillofrights.com, and can be found at that Web address.

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The Taxpayer Bill of Rights will appear as referendum Question One on the Nov. 7 ballot. Voters will be asked if they want to limit government spending by tying increases to specific growth rates like inflation and population change.

Some campaigning has gone on this summer, but the real battle begins now. The opposing camps will spend thousands on advertisements and shift fundraising into high gear. They are also arranging speaking engagements at Rotary clubs, chambers of commerce and special town meetings from Kittery to Fort Kent.

The proposal is championed by citizen activist Mary Adams of Garland and the conservative Maine Heritage Policy Center. The opponents are led by Citizens United, a political action committee that gets its clout from the Maine Municipal Association and a list of other groups.

"It is likely to stand out this year," said Ron Schmidt, associate professor of political science at the University of Southern Maine. More families are struggling with higher costs for things like heating oil and health care, which could generate support for a question that puts limits on government spending, he said.

"When push comes to shove, this needs to be an issue that is front and center," Schmidt said.

Both sides in this campaign say they want to strengthen Maine's economy and reduce tax burdens on families and businesses. But that's where the similarities end.

"It's a power shift from government to people, I think that's why you're seeing government entities squawk," said Adams, who led the fight against school funding mandates in the 1970s. "I haven't understood the argument that it curtails democracy."

Christopher St. John, director of the Maine Center for Economic Policy, opposes the idea.

"The challenge for proponents is to tell the truth," St. John said. "Their message to date is that this is simple, and it won't lead to cuts. It is a simple message and an attractive one, but it isn't true."

The proposal is essentially a spending cap on state and local governments, with a provision that allows voters to override the imposed limits. About 30 states have some kind of cap laws.

The Taxpayer Bill of Rights in Colorado stands out as the most stringent and was the model for the Maine proposal.

"Theirs is a revenue limit; ours is an expenditure limit," said Bill Becker, president of the Maine Heritage Policy Center. Staffers there wrote the initial proposal two years ago. "We took the parts that have been successful in Colorado, and we made changes to make it work for Maine."

Under the proposal, towns and counties would have to base spending increases on inflation plus population change, or on the change in overall property values, whichever is lower. Spending at the state level would be tied to inflation and population increases. School budgets would be tied to inflation and enrollment.

If a town wanted to override the limit, any spending increase would have to be approved by a two-thirds majority of the governing body, like a city council or town meeting. The increase would then have to gain approval from a majority of all voters.

At the end of each fiscal year, any state revenue surplus would be split up, with 80 percent for tax relief and 20 percent for a state rainy day fund.

Larry Benoit, a strategist affiliated with Portland-based Bernstein Shur, says the plan is a bad idea.

"It will ultimately rob communities of local control," said Benoit, campaign director for Citizens United. "Only the Legislature will be able to change it. If a community does not vote for TABOR, it will still have to live with it.

The two-thirds requirement for the override is a problem, Benoit said, because it allows a minority to block spending increases that have the support of the majority.

"It's a one-size-fits-all formula that ignores local conditions and regional conditions with respect to cost," Benoit said.

The proposal is the latest in a string of citizen-initiated referendums and legislative moves responding to unease over taxes.

Voters in 2003 approved a plan to boost state aid to schools to 55 percent of the operating budgets. Another referendum in June 2004 reaffirmed that plan, but legislators later moved to spread the increase out over four years. In November 2004, a referendum brought forward by Carol Palesky was shot down at the polls. It would have capped property taxes at 1 percent of the appraised value.

Two months later, the Legislature adopted the bill known as LD 1. It boosts school aid, puts a cap on how much towns and cities can collect in property taxes and expands two tax breaks. LD 1 placed Maine among the 30 states with similar cap laws. But Adams said the caps are too lenient and people need immediate relief.

The central question at this point is unavoidable: Will the proposal bring budget cuts"

"When you apply the formulas, roughly 35 percent, or 172 of Maine municipalities, would actually have outright budget cuts to comply," Benoit said. "Thirty-one percent of schools would face budget cuts."

Benoit was quoting an analysis released in June by the Maine Municipal Association, which opposes the bill. The town of Guilford in Piscatiquis County, for example, saw a 28 percent decline in valuation last year. That would mean municipal budget cuts of 28 percent, according to Benoit and St. John.

"Change can be a positive or negative percentage," Benoit said. "We're very confident in our interpretation of this."

Those who wrote and support the bill, though, say it never requires cuts. The worst that can happen, they say, is flat funding year to year. Using the Guilford example, voters in town would have several options, said Becker of the Heritage Policy Center.

They could keep the same budget levels from the previous year, or they could use the override process to increase spending. Voters also could cut the budget, Becker said.

"This law is meant to restrain excessive government growth," he said. "That is the fundamental issue."

Two other major disagreements will continue to play prominently in the campaign. The sides disagree on how cumbersome the override process would be, and whether it would be feasible in most communities. The other question is about how the law has worked in Colorado, which adopted its Taxpayer Bill of Rights in 1992.

Last fall, voters in Colorado suspended a key provision in the law. They allowed the state Legislature to spend nearly $4 billion over the next five years, money that otherwise would have been returned to taxpayers.

Both sides in Maine have signed up a long list of speakers from Colorado, ranging from ranchers to Republican Gov. Bill Owens. Some will try to convince Mainers that the bill has failed, leading to an erosion in schools and economic development. Others, like Owens, will say the bill has succeeded, bringing new jobs and people into the state, and cutting unnecessary spending.

The long list of ambiguities could make it tough for voters to decide. But everyone can expect a spirited debate: Taxes are one issue about which residents are generally not shy.

"I hope that it gets the attention of the politicians and shows them the citizens are fed up and they should change the way we are taxed," said George Fogg of North Yarmouth, a retiree whose annual property taxes have risen from $600 to $2,300 in the past two decades.

Kimberly Whipkey, a college student who grew up in Portland, is on the other side. She has a younger sister in public school and does not want to see a drop in the quality of programs.

"I'm worried that the implications of this formula will mean severe spending cutbacks for the things Mainers care about, like education, health care and public safety."

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