The Maine Heritage Policy Center raises an intriguing question with a lawsuit filed this week in Kennebec County Superior Court: When does public money stop being public?

The defendant in the suit is the Maine Municipal Association, which, among other things, bankrolled two successful campaigns against the MHPC’s referendum proposals that aimed to limit government spending and reduce the excise tax on vehicles.

The conservative-leaning think tank alleges that MMA is funded by local governments and should be considered a government agency for the purposes of campaign finance laws.

MMA claims that it is a private nonprofit supported by a voluntary membership (made up of cities and towns), and is free to participate in referendum campaigns.

Both sides raise interesting points, and the court is the right place to decide this issue. Cities and towns should be able to make their case to legislators and voters, but they should not be able to do something with taxpayer money collectively that they can’t legally do on their own.

The MMA provides a range of services for communities, including free legal advice. It also goes to Augusta to represent the concerns of cities and towns before the Legislature.

That lobbying is no different, they argue, than what they did in the TABOR 2 campaign last fall. Only in this case, the law-making body was not the Legislature, but the electorate itself.

Where this gets dicey, however, is that governments are limited in their ability to use taxpayer money to take part in political campaigns, and all of MMA’s money comes from governments. Cities and towns levy taxes and end up using part of the money they raise to fund campaigns that may be against the interest of some taxpayers.

In a 2004 opinion, then-Attorney General Steve Rowe said the limits on the use of public funds in referendum campaigns was “difficult to define in the abstract,” but had to be reviewed on a case-by-case basis.

If the court can do a better job of drawing the line between what is acceptable and what isn’t, both sides would be better off.