The Maine Association of Realtors has purchased air time for two television ads in support of repealing the tax reform law passed last year.

The air time cost the association $197,511 and was purchased through a committee it established to influence Question 1, said the committee’s treasurer, Cindy Butts.

The law would broaden the state’s sales tax base and decrease the income tax. It would shift savings that many homeowners get by claiming their mortgage interest and other qualifying deductions on their state tax returns into a new tax credit.

Realtors oppose the law because Mainers in top income brackets would not be eligible for the credit, said Linda Gifford, the principal lobbyist for the association.

“The credit starts to phase out, and it goes away,” she said.

The phaseout begins for a married couple at $55,000 in income and tapers off to zero for a family that maximizes its deductions and has income of $275,000, said Richard Woodbury, an economist and former lawmaker who has analyzed the tax reform package.

“We think that it is worth less than the mortgage interest deduction, both in real dollars and in perception,” Gifford said, “and we think that because it phases out, it is worth less or nothing for people who we want to take advantage of the tax policy deductions and spend money.”

The Maine Association of Realtors has been promised as much as $100,000 from the National Association of Realtors for the ads urging repeal, Gifford said.

Supporters of tax reform, who are urging voters to reject the repeal effort by voting no on Question 1, say the ads are deceptive.

“In one of the ads they talk about itemized deductions going away, but they neglect to talk about the tax credits that replace the deductions,” said Crystal Canney, who works for the No Higher Taxes for Maine Political Action Committee.

One of the Realtors’ ads calls the tax reform law “another government bailout for the wealthy.”

“It couldn’t be more misleading,” Canney said.

CHAMBERS OPPOSE REPEAL OF LAW

A news conference on the tax reform law was held Thursday at the Portland Regional Chamber’s office. That chamber, as well as the Maine State Chamber of Commerce, the Bangor Region Chamber of Commerce and the Androscoggin County Chamber, oppose the people’s veto effort.

Maine Revenue Services has said the tax reform law would lower income taxes or provide a refundable credit for 95.6 percent of Maine filers. The agency also has analyzed tax returns and buying habits to estimate that poorer Mainers would be more likely to receive overall tax cuts than the highest earners.

SCARCELLI CALLS FOR STATE BANK

Democratic gubernatorial candidate Rosa Scarcelli proposed a “Maine State Bank” on Thursday to keep state revenue available for lending to small businesses, farmers, students and economic development projects.

She said in a news release that a Maine State Bank would provide capital to businesses in an environment where credit markets are tight and foreclosure rates are high.

“Each year in Maine, hundreds of millions of dollars in state revenue — our money — is deposited into large out-of-state and foreign-owned banks. Those banks then lend our deposits to their customers, to create jobs mostly outside of Maine. The profits from these loans go to pay lavish banker’s salaries, finance shaky derivative investment schemes and pay handsome returns to their shareholders in other parts of the world,” Scarcelli said. “The Maine State Bank would instead put our money to work right here at home.”

All state revenue would be deposited in the Maine State Bank, which would lend and invest the money in Maine, keeping the profits here, Scarcelli said.

She said the idea is modeled after the Bank of North Dakota, which was founded in 1919. Partly because of its state bank, North Dakota has been insulated from the economic downtown and banking crisis, Scarcelli suggested. 

Staff Writer Matt Wickenheiser and Ethan Wilensky-Lanford of the Kennebec Journal contributed to this report.