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The costs of the Legislature’s decision to pay for the state’s subsidized insurance program by passing a new beverage tax without public input are continuing to rise, as supporters and opponents prepare for a fight over a referendum to repeal the tax this fall.

On Monday, the Maine Secretary of State’s Office certified more than 72,000 signatures on a petition calling for the referendum. The number of signatures certified is 17,000 more than required, virtually assuring the petition would not face a court challenge.

Hundreds of thousands of dollars already have been spent in the debate over the new taxes. Backed by the beer, wine and soda industry and the Maine Restaurant Association, the petition drive cost nearly $500,000. Most of the $86,000 opponents spent to try to keep the issue off the November ballot came from an out-of-state donor who lives part time in Maine and supports Democratic causes.

And, that’s only the beginning.

Money is expected to pour into the public debate this fall, as the beverage industry tries to repeal a tax that is supporting the DirigoChoice program Gov. John Baldacci pushed through in his first term and has continued to support with controversial taxes and fees.

This upcoming fight and the money that will be spent on it might have been avoided if the Legislature had allowed the public to speak before adopting this unpopular tax. The Legislature passed it without a public hearing in the final days of the session to replace a cigarette that didn’t have the votes it needed in the Senate.

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The new taxes – including a $4 tax on a gallon of soda syrup, a 42-cent tax on a gallon of bottled soda and a doubling of the tax on beer and wine – are expected to raise between $55 million and $75 million. The Legislature also included a 1.8 percent tax on claims paid by insurance companies and the self-insured.

Opponents who have been arguing that DirigoChoice would collapse without the new taxes aren’t being truthful. The program has a funding mechanism that could continue to support it – an assessment on private health insurance and the self-insured. However, the money that assessment is raising (about $33 million annually) isn’t enough to increase the size of the governor’s program.

Insuring a little more than 12,000 people, the program is still quite small. That’s not to say that to each of the people receiving health insurance through DirigoChoice isn’t important, but the program certainly hasn’t attained the success the governor must have envisioned for it initially. The new taxes adopted to support it also belie the initial promise that the program would pay for itself by creating savings for health care providers and insurers.

The millions that will be spent on campaigns to defeat and defend these new taxes could have been saved if the Legislature had adopted them the right way. Then again, continually finding new and creative ways to prop up this program can’t be easy.

Brendan Moran, editor

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