Election 2009 – Question 4 – TABOR issue back on the ballot

By Natalie Bazinet
Staff Writer
    Question Four on the Nov. 3 ballot will read “Do you want to change the existing formulas that limit state and local government spending and require voter approval by referendum for spending over those limits and for increases in state taxes?”
    Titled “An Act to Provide Tax Relief,” the bill proposes restrained growth of state and local government “by imposing expenditure limitations on state and local government and by requiring a procedure of voter approval of certain state tax increases,” according to the bill’s summary.
    Generally speaking, under Tabor II, a municipality or county who exceeds their General Fund, Highway Fund or Other Special Revenue Funds must seek voter approval to raise taxes     
    As the bill is written, during the current fiscal year of which the bill takes effect, the most yearly spending can increase in the General Fund, Highway Fund and Other Special Revenue Funds is proportionately equal to the increases of population and inflation with the addition of any increases attributable to items approved under section 2043.
    According to section 2043, in order for the state to increase revenue (taxes), the increase must be approved by a majority vote of all the members of each House of the Legislature and the measure must be approved by a majority of voters (unless voter approval is not required in situations such as the measure is an emergency tax or in the case where Maine’s revenue is less than annual payments on general obligation bonds, required payments related to pensions and final court judgments).
    Should the state, a county or a municipality generate more funds than they need to fill their set budget, 20 percent of that excess tax money must be placed in a budget stabilization fund and 80 percent of the excess must be placed in a tax relief fund. Excess money placed into the budget stabilization fund may only be accessed during years that Maine, a county or a municipality haven’t collected enough revenue (taxes) to fund their level costs (in respect to an increase in population and inflation).
    The tax relief reserve fund may only be used to provide tax relief though broad-based reductions in tax rates or refunds proportionate to individual income tax personal exemption claims made in the previous tax year.
    The Highway Fund Reserve Fund must be used only to provide a decrease in motor fuels taxes.
    For state agencies that manage Other Special Revenue Funds, those account managers must report excess surpluses to the Legislature with a plan to refund those revenues.     
    A county may exceed or increase the county assessment limit only if approved by a vote of a majority of all the members of both the county budget committee or county budget advisory committee and the county commissioners and if approved by the voters at a referendum held at a regular or special election.
    Supporters of the bill feel that linking spending to the rate of inflation and population growth allows spending to increase annually without surprise tax increases the majority of voters don’t support.
    Opponents worry that the bill will hurt transportation and education of the state, predicting that the state government will fall farther behind in its obligations to pay the majority of educational costs, leading to property tax increases to pay for schools.
    Should Tabor II be approved by voters on Tuesday, the bill does allow for a county to exceed or increase the county assessment limit if a majority of voters of the county budget committee (or its equivalent), the county commissioners and the voters at a referendum held at a regular or special election.
    According to the bill, a municipality may exceed or increase the property tax levy limit if the municipal budget is adopted by town meeting or referendum by following very specific steps listed in section 16 of the bill. If a municipal budget is adopted by a town council or city council, the property tax levy limit may also be exceeded thorough a specific set of steps listed in section 16 of the bill.