AUGUSTA – Mainers frustrated by high taxes went to the polls eight times to vote on tax issues during Gov. John Baldacci’s time in office.

And while there have been tweaks and changes — cigarette tax increases, a renewed effort to send more money to local schools — the tax burden on Mainers remains largely unchanged after his eight years in office.

“It was never quite as easy as one might think,” said Laurie Lachance, who served as state economist for the first 18 months of Baldacci’s time in office. “Make a plan and put it in place.”

Early on, Lachance, who now heads the Maine Development Foundation, worked with Baldacci adviser Jack Cashman on various tax reduction plans. They pinpointed escalating school costs as a major cost driver, which helped lead Baldacci to push for school district consolidation in 2007.

Meanwhile, various groups — including think tanks, political and business organizations and, most recent, the Maine Republican Party — supported and placed their own tax plans on the ballot and worked to repeal efforts enacted by the Legislature.

Property taxes, income taxes, soda taxes, car excise taxes and the sales tax have all been part of those reform or repeal efforts.

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Twice voters overturned legislative action. Three times they rejected tax and expenditure limitations popular in other states. On one occasion, they split the vote three ways, setting up a second vote that required the state to fund 55 percent of the cost of public education.

In 2003, a national group that ranks all states based on state and local tax burden placed Maine at the top of the list for the highest burden in the country. That ranking drove much of the discussion, concern and debate, said Sen. Richard Woodbury, a Yarmouth independent.

As a House member, Woodbury served on the Legislature’s Taxation Committee from 2005 to 2009 and as chairman of a special committee dedicated to property tax reform.

“The broad structure of our tax code is essentially unchanged, for better or worse,” said Woodbury, who is an economist. “I have been a bit disappointed we never got there in this administration.”

Two years ago, the Tax Foundation in Washington recalculated the way it figures tax burden by excluding taxes paid by nonresidents. That dropped Maine’s ranking from first to eighth.

Today, the same group ranks Maine 15th.

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Baldacci, who served on the Legislature’s Taxation Committee while a state senator, was well aware of the pitfalls of tax reform, said Christopher St. John, executive director of the Maine Center for Economic Policy.

“We have to acknowledge that people have been finding fault with Maine’s tax system for a very long time,” St. John said. “It’s a lot easier to make Maine’s system worse than it is to make it better.”

St. John said L.D. 1, which put in place limits on state, school and municipal spending, and outlined the state’s commitment to get to 55 percent school funding, is misunderstood.

Gains have been modest, but it has slowed the growth of government spending, he said.

“Property taxes did not grow after 2005 at the same pace they had been growing,” he said.

Critics of Baldacci’s plan to ramp up to 55 percent funding by this year said the plan was flawed because it didn’t account for a possible economic downturn.

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That’s exactly what happened, as the state has reduced funding down to 48 percent this year because of the national recession.

Earlier this year, voters repealed a law passed by Democrats that would have lowered the income tax, but expanded the sales tax to more services.

The only Republican to support the measure — former Sen. Peter Mills, R-Cornville — said Baldacci pulled items out of the plan, such as ski lift tickets, and then never campaigned to support it.

“He kind of bollixed it up when he bowed to the ski industry,” Mills said. “Democrats and I voted for it because it was the only bill we had. He never used his bully pulpit to create it or promote it. He could defend it with impunity. He didn’t have his heart in it.”

Baldacci said he knew the bill was in trouble when it passed the Legislature on such a partisan vote.

“It didn’t get any Republican support,” he said. “It made it much more of a partisan issue.”

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To Woodbury, Baldacci deserves credit for not increasing broad-based taxes during his administration.

Cigarette taxes were increased, and Baldacci did work to ease business equipment taxes, he said.

But overall, there was no major change.

“Major structural reform of the tax code I don’t think was ever a priority of this governor,” Woodbury said.

MaineToday Media State House Writer Susan M. Cover can be contacted at 620-7015 or at:

scover@mainetoday.com

 


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