Question 4, which reads on the ballot as follows: "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?"
I will state up front that recent ads in opposition of the issue (which are running over and over and over) more than irritate me. They are intended to play on the fears of people rather than addressing the facts of what the proposed legislation requires - which this posting provides below. But the opposition plays right in to that old adage "We fear the devil we don't know more than the devil we do." So I need to say right up front:
This legislation does NOT cut current funding levels for Education, Home Health Care or other health care services, or any other essential services. Those ads in opposition to Question 4 lie.
Perhaps it would help to known that the opponents of TABOR have raised (and outspent) the proponents 12:1 in their attempts to defeat this initiative by the voters of Maine. That money has come almost entirely (over 99 percent) from the following sources:
- SEIU - a major union which requires employees in numerous professions, including the health care fields, to pay a percentage of their wages in dues to the union. (The more employees hired and the higher the union-negotiated salaries and fees those employees make, the more money the union gets.);
- The National Education Association - another employee union, comprised of teachers and college and university professors. Same means of dues assessment and thereby union financial power.
- S.Donald Sussman, a Connecticut resident and Wall Street Hedge fund founder gave $370,000 to the opponents of TABOR. Mr. Sussman's hedge fund received a $200 million taxpayer funded bailout.
- Maine Municipal Association (MMA), the group representing community government, gave $170,219 to Citizens United (the organization behind the opposition to TABOR). That $170,219 came from Maine property taxes - taxpayers like you and me. (Did you vote for that at your town meeting? I didn't.)
- Less than 1 percent of the funding donated to the opposition against TABOR has come from individual Maine citizens.
According to a Poll released at that same Press Conference, more Mainers support Q. 4 to limit government spending and to require voter approval of spending and tax hikes. Those statistics were: 47 percent in favor of TABOR, 8 percent undecided, and 45 percent opposed.
TABOR has been soundly endorsed by Maine's Business Community. In particular:
Portland Regional Chamber of Commerce
Androscoggin Chamber of Commerce
Maine Motor transport Association
Association of Builders & Contractors of Maine
Maine Merchants Association
and many small businesses across Maine
It was also been endorsed by Paul LePage, the Mayor of Waterville and general manager of Marden's Surplus & Salvage stores across Maine. He states "The progress we can point to in Waterville is possible for every city and town in the state of Maine. Reducing taxes encourages businesses to expand and provide new opportunities for employment. Allowing residents to keep more of their hard-earned wages gives those residents new buying power to invest in the local economy and better save for the future.
"These are the same results TABOR will achieve throughout the entire state.
"In Waterville, we put reasonable parameters on ourselves so we could control spending and lower taxes. As a result, we became innovative and efficient so we could improve our community.
"This is what TABOR will do for all Maine towns, counties and our state. Change is possible, and TABOR will make the changes that Mainers deserve.
"I'm voting for TABOR this November because it will achieve real progress for families and communities across Maine. Mainers are ready for results. TABOR is a guarantee."
It should be noted that Waterville is the 13th largest municipality in the state. He became mayor in 2003. You can email Mr. LePage at: mayor1@waterville-me.gov
I have read the proposed legislation. You can, too. Go to http://www.Maine.gov . This is the home page of Maine state government. In the upper left hand corner you will see a listing for Legislation. Click on that. It will take you to a listing for Question 4.
HOWEVER, BELOW YOU WILL FIND THE PROPOSED LEGISLATION. I HAVE DONE ALL THE WORK FOR YOU - highlighting the individual sections, how the law will work if approved, showing you that all those scare ads are totally unrelated to the truth of how this law will work and impact our lives. If you don't believe me, read what is below or go to the Maine.gov page listed above. Bottom line, voting YES for TABOR - voting YES on Question 4, is the way to take out government back - to control government spending and to reduce the rampant taxation of Mainers by an irresponsible attitude in Augusta and special interests.
NOTE: After reading the proposed legislation, I want to correct some mis-information I heard at an Eddington Selectmen's meeting re: this legislation. If you read the proposed legislation you will see that the state will have to reimburse the local government for any required voting by the taxpayers should the Legislature feel the need to raise taxes under the conditions listed under the new law.
NOW, a few key pieces in the proposed legislation:
CHAPTER 167
State Tax and Spending Limitation
§ 2041. Expenditure and revenue requirements; construction of chapter
The following provisions of this section apply, notwithstanding any other provision of law.
1. Expenditure limitations. Annual authorized state appropriations and allocations may not exceed the limits provided in this chapter unless authorized by the procedures specified in this chapter.
2. Revenue increases. An increase in revenue of the State may be adopted only as provided in section 2043.
3. Construction. It is the intent that this chapter be interpreted liberally to restrain excess growth of state and local government.
§ 2042. Definitions
As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings.
1. Emergency. “Emergency” means extraordinary circumstances outside the control of the Legislature, including:
A. Catastrophic events such as natural disaster, terrorism, fire, war and riot;
B. Citizens' initiatives or other referenda; or
C. Court orders or decrees.
2. Increase in revenue. ”Increase in revenue” means any legislation or tax levy that is estimated to result in a net gain in state revenue of at least 0.01% of General Fund revenue in at least one fiscal year and:
A. Enacts a new tax;
B. Increases the rate or expands the base of an existing tax;
C. Repeals or reduces any tax exemption, credit or refund; or
D. Extends an expiring tax increase.
3. Inflation adjustment factor. ”Inflation adjustment factor” means the increase in the Consumer Price Index for the most recently available calendar year as calculated by the United States Department of Labor, Bureau of Labor Statistics. The inflation adjustment factor may not be less than zero.
4. State Spending. ”State spending” means any authorized state appropriations and allocations.
5. Population adjustment factor. ”Population adjustment factor” means the average annual percentage increase in population for the 3 most recent years for which data is available as determined annually by the Executive Department, State Planning Office statewide based on federal census estimates. The population adjustment factor may not be less than zero.
6. Revenue. ”Revenue” means taxes collected by the State.
7. Tax. “Tax” means any amount raised for the general support of government functions. It does not include charges to cover the cost of specific goods or services provided or fees or other charges that are assessed for the purposes of covering the cost of administration of a government activity related to the purposes for which the fee is charged.
§ 2043. Approval of revenue increases
1. Approval of increases. The following form of approval is required to adopt an increase in state revenue:
A. For an increase in revenue of the State:
(1) The measure must be approved by a majority vote of all the members of each House of the Legislature; and
(2) Except as provided in subsection 2, the measure must be approved by a majority of the voters as described in subsection 3.
2. Exceptions. Voter approval under subsection 1, paragraph A, subparagraph (2) is not required if:
A. Annual state revenue is less than annual payments on general obligation bonds, required payments related to pensions and final court judgments; or
B. The measure is an emergency tax and the provisions of section 2048 are followed.
3. Approval by voters; emergency approval. The question of whether to adopt legislation to impose an increase in revenue of the State must be submitted to the voters for approval at the next general election as defined in Title 21-A, section 1. If the Legislature determines by a majority vote that legislation to increase taxes should take effect sooner than the next general election, the Legislature may provide for submission of the question to the voters at any regular or special election as defined in Title 21-A, section 1.
4. Revenue estimates. A measure submitted to the voters under subsection 3 must include an estimate of the amount to be raised by the measure for the first 4 fiscal years of its implementation if the measure is submitted to the voters in the first year of a fiscal biennial budget and 3 years if submitted in the second year of a fiscal biennial budget. (GOOD)
5. Notice. At least 30 days before an election required under subsection 3, the Secretary of State shall mail at the least cost a titled notice or set of notices addressed to “All Registered Voters” at each address of every active registered voter. Notices must include the following information and may not include any additional information: (which means taxpayers will have to do some "homework")
A. The election date, hours, ballot title and text and local election office address and telephone number;
B. For each proposed revenue increase, the estimated or actual total of fiscal year spending for the current year and each of the past 4 years and the overall percentage and dollar change; (GOOD) and
C. For the first full fiscal year of each proposed revenue increase, estimates of the maximum dollar amount of each increase and of fiscal year spending without the increase. (GOOD)
Except by later voter approval, if an increase in revenue exceeds any estimate prepared under paragraph C for the same fiscal year, the tax increase is thereafter reduced in proportion to the amount of the excess, and the excess revenue that was collected must be transferred to the Tax Relief Reserve Fund under section 2045 in the next fiscal year. (GOOD) Ballot questions for revenue increases must begin: “Shall (description of the tax increase) to increase state revenues by (amount of first or, if phased in, full fiscal year dollar increase) annually for the purpose of...?” The ballot question must also contain the information of paragraphs B and C. (GOOD -provides accountability)
6. Costs. The State shall reimburse municipalities for the costs of a special election as defined in Title 21-A, section 1, called under this section. (VERY GOOD!)
§ 2044. Expenditure limitation
1. State expenditure limitation. Beginning with the first fiscal year that begins after this section takes effect, the maximum annual percentage change in state fiscal year spending in the categories specified in this subsection equals the inflation adjustment factor plus the population adjustment factor and any increases attributable to measures approved under section 2043.
This limitation must be calculated separately for the following categories:
A. General Fund;
B. Highway Fund; and
C. Other Special Revenue Funds, for which separate individual limitations must be applied by program, including internal service accounts but not bond fund accounts.
2. Exceptions. The following may not be counted in calculating expenditure limitations under subsection 1:
A. Amounts returned to taxpayers as refunds of amounts exceeding the expenditure limitation in a prior year;
B. Amounts received from the Federal Government;
C. Amounts collected on behalf of another level of government;
D. Pension contributions by employees and pension fund earnings;
E. Pension and disability payments made to former government employees;
F. Amounts received as grants, gifts or donations that must be spent for purposes specified by the donor;
G. Amounts paid pursuant to a court award; or
H. Reserve transfers.
3. Approval of increases. The following form of approval is required to adopt an increase in state spending beyond the limitation:
A. For an increase in state spending:
(1) The measure must be approved by a majority vote of all the members of each House of the Legislature; and
(2) Except as provided in subsection 2, the measure must be approved by a majority of the voters as described in subsection 4.
4. Exceptions. Voter approval under subsection 3, paragraph A, subparagraph (2) is not required if the spending is as a result of an increase in state revenue approved under section 2043.
5. Approval by voters; emergency approval. The question of whether to adopt legislation to impose an increase in State spending beyond the limitation must be submitted to the voters for approval at the next general election as defined in Title 21-A, section 1. If the Legislature determines by a majority vote that legislation to increase spending beyond the limitation should take effect sooner than the next general election, the Legislature may provide for submission of the question to the voters at any regular or special election as defined in Title 21-A, section 1.
6. Spending estimates. A measure submitted to the voters under subsection 3 must include an estimate of the spending increase by the measure for the first 4 fiscal years of its implementation if the measure is submitted to the voters in the first year of a fiscal biennial budget and 3 years if submitted in the second year of a fiscal biennial budget.
§ 2045. Transfers and refund of unappropriated General Fund surplus
1. Fund created. The Tax Relief Reserve Fund, referred to in this section as “the fund,” is created for the purposes set forth in this chapter. The fund may not lapse, but remains in a continuing carrying account to carry out the purposes of this section.
2. Transfer. At the close of each fiscal year, the State Controller shall identify the amount of General Fund unappropriated surplus and make the following transfers:
A. Eighty percent of the unappropriated surplus must be transferred to the fund; and
B. Twenty percent of the unappropriated surplus must be transferred to the Maine Budget Stabilization Fund established in section 1522.
3. Notification. By September 1st annually, the State Controller shall notify the Legislature and the State Tax Assessor of the amount in the fund as a result of the transfers required by subsection 2.
4. Refund. If the amount in the fund exceeds 1% of General Fund expenditures, the Legislature shall, by September 15th, enact legislation to provide for the refund to taxpayers of amounts in the fund. Refunds may take the form only of temporary or permanent broad-based tax rate reductions.
5. Refund in case of legislative inaction. If the Legislature does not enact legislation by September 15th to provide refunds pursuant to subsection 4, then the State Controller shall, by September 30th, notify the State Tax Assessor of the amount in the fund. The State Tax Assessor shall calculate a one-time bonus personal exemption refund. The amount of the personal exemption refund must be calculated by dividing the amount in the fund identified by the State Controller under subsection 3 by the number of personal exemptions claimed on income tax returns filed for tax years beginning in the previous calendar year and rounded down to the nearest $5 increment. The State Tax Assessor shall issue a refund by October 15th to a taxpayer who filed an income tax return by April 15th of the same calendar year based on the number of personal exemptions claimed on the taxpayer’s return without regard to the taxpayer’s tax liability for the year.
§ 2046. Transfers and refund of unallocated Highway Fund surplus
1. Fund created. The Highway Fund Reserve Fund, referred to in this section as “the fund,” is created for the purposes set forth in this chapter. (GOOD. Means maybe we might get highways & bridges fixed without perpetual Bonds needed.)
2. Transfer. At the close of each fiscal year, the State Controller shall identify the amount of Highway Fund unallocated surplus and make the following transfers:
A. Eighty percent of the unallocated surplus must be transferred to the fund; and
B. Twenty percent of the unallocated surplus must be transferred to the Maine Highway Budget Stabilization Fund established in section 1523.
3. Notification. By September 1st annually, the State Controller shall notify the Legislature of the amount in the fund as a result of the transfers required by subsection 2.
4. Refund through legislative action. If the amount in the fund exceeds 1% of Highway Fund expenditures for the previous fiscal year, the State Tax Assessor shall calculate, based on the amount in the fund, a proportional reduction in the taxes on motor fuels under Title 36, Part 5 to become effective the following January 1st and remain in effect for one calendar year. (GOOD. Means the price of gasoline and diesel might be lowered in Maine.)
§ 2047. Revenues of Other Special Revenue Funds accounts
By September 1st annually, each state agency that manages an Other Special Revenue Funds account shall submit an annual report to the Legislature identifying revenues received in the preceding fiscal year that exceed the expenditure limitation established in section 2044 and any other uncommitted revenues received during the previous fiscal year and proposing a plan for refunding the amount identified that exceeds 10% of the previous fiscal year’s expenditure.
§ 2048. Emergency taxes
1. Emergency taxes permitted; conditions. The State may impose emergency taxes only in accordance with this section:
A. The tax must be approved for a specified time period by a majority of the members of each House of the Legislature;
B. Emergency tax revenue may be spent only after other available reserves are depleted and must be refunded 180 days after the emergency ends if not spent on the emergency; and
C. The tax must be submitted for approval by the voters at the next regular election, as defined in Title 21-A, section1.
2. Absence of approval. If not approved by the voters as provided in this section, an emergency tax expires 30 days following the election.
Sec. 9. 5 MRSA §13063-C, sub-§4, ¶B, as amended by PL 2005, c. 2, Pt. A, §9 and affected by §14, is further amended to read:
B. Notwithstanding section 1585, any balance remaining in the program after July 31, 2007 must be transferred to the Maine Budget Stabilization Fund as established in section 15321522.
Sec. 10. 5 MRSA §17253, sub-§3, as amended by PL 2005, c. 2, Pt. A, §10 and affected by §14, is further amended to read:
3. Components of unfunded liability contribution. The annual valuation report prepared by the actuary in accordance with section 17107 must include identification of the impact on the employer contribution rate of any excess General Fund revenues transferred to the Retirement Allowance Fund pursuant to section 1532. (This is important because of the huge, currently unfunded, retirement liability the state has for state employees.)
Sec. 11. 25 MRSA §1612, sub-§7, as amended by PL 2005, c. 2, Pt. A, §12 and affected by §14, is repealed.
Sec. 12. 30-A MRSA §706-A, sub-§3 is amended to read:
3. Growth limitation factor. The growth limitation factor is calculated as follows.
A. For fiscal years when the State Tax Assessor has determined that the state and local tax burden ranks in the highest 1/3 of all states, the growth limitation factor is average real personal income growth but no more than 2.75%, plus the property growth factor. (Maine is already there!)
B. For fiscal years when the state and local tax burden ranks in the middle 1/3 of all states, as determined by the State Tax Assessor, the growth limitation factor is the average real personal income growth plus forecasted inflation plus the property growth factor.
C. The growth limitation factor may not exceed average real personal income growth plus forecasted inflation.
Sec. 13. 30-A MRSA §706-A, sub-§7 is amended to read:
7. Process for exceeding county assessment limit. 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, as defined in Title 21-A, section 1.
Unless a county charter otherwise provides or prohibits a petition and referendum process, if a written petition, signed by at least 10% of the number of voters voting in the last gubernatorial election in the county, requesting a vote on the question of exceeding the county assessment limit is submitted to the county commissioners within 30 days of the commissioners' vote pursuant to this subsection, the article voted on by the commissioners must be submitted to the legal voters in the next regular election or a special election called for that purpose. The election must be held within 45 days of the submission of the petition. The election must be called, advertised and conducted according to the law relating to municipal elections, except that the registrar of voters is not required to prepare or the clerk to post a new list of voters, the filing requirement contained in section 2528 does not apply and absentee ballots must be prepared and made available at least 14 days prior to the date of the referendum. For the purpose of registration of voters, the registrar of voters must be in session the secular day preceding the election. The voters shall indicate by a cross or check mark placed against the word "Yes" or "No" their opinion on the article. The results must be declared by the county commissioners and entered upon the county records.
Sec. 14. 30-A MRSA §706-B is enacted to read:
§706-B. Cost center budget summary format
Each county shall use the cost center budget summary format developed by the Department of Audit under Resolve 2005, chapter 136 in adopting budgets beginning with the first fiscal year that begins after 6 months from the effective date of this section.
Sec. 15. 30-A MRSA §5721-A, sub-§3, is amended to read:
3. Growth limitation factor. The growth limitation factor is calculated as follows. (Here is finally a formula the state must use in calculating tax assessment. GOOD!!!)
A. For fiscal years when the State Tax Assessor has determined that the state and local tax burden ranks in the highest 1/3 of all states, the growth limitation factor is average real personal income growth but no more than 2.75%, plus the property growth factor.
B. For fiscal years when the state and local tax burden ranks in the middle 1/3 of all states, as determined by the State Tax Assessor, the growth limitation factor is the average real personal income growth plus forecasted inflation plus the property growth factor.
C. The growth limitation factor may not exceed average real personal income growth plus forecasted inflation.
Sec. 16. 30-A MRSA §5721-A, sub-§7, is amended to read:
7. Process for exceeding property tax levy limit. A municipality may exceed or increase the property tax levy limit only by the following means. (EDDINGTON / CLIFTON RELATED)
A. If the municipal budget is adopted by town meeting or by referendum, the property tax levy limit may be exceeded by the same process that applies to adoption of the municipal budget except that the vote must be by written ballot on a separate article that specifically identifies the intent to exceed the property tax levy, and the action must be approved by the voters at a referendum held at a regular or special election, as defined in Title 21-A, section 1.
B. If the municipal budget is adopted by a town council or city council, the property tax levy limit may be exceeded only if approved by a majority vote of all the elected members of the town council or city council on a separate article that specifically identifies the intent to exceed the property tax levy limit and approved by the voters at a referendum held at a regular or special election, as defined in Title 21-A, section 1. Unless a municipal charter otherwise provides or prohibits a petition and referendum process, if a written petition, signed by at least 10% of the number of voters voting in the last gubernatorial election in the municipality, requesting a vote on the question of exceeding the property tax levy limit is submitted to the municipal officers within 30 days of the council’s vote pursuant to this paragraph, the article voted on by the council must be submitted to the legal voters in the next regular election or a special election called for that purpose. The election must be held within 45 days of the submission of the petition. The election must be called, advertised and conducted according to the law relating to municipal elections, except that the registrar of voters is not required to prepare or the clerk to post a new list of voters and absentee ballots must be prepared and made available at least 14 days prior to the date of the referendum. For the purpose of registration of voters, the registrar of voters must be in session the secular day preceding the election. The voters shall indicate by a cross or check mark placed against the word “Yes” or “No” their opinion on the article. The results must be declared by the municipal officers and entered upon the municipal records.
Sec. 17. 30-A MRSA §5721-B is enacted to read:
§5721-B. Cost center budget summary format
Each municipality shall use the cost center budget summary format developed by the Department of Audit under Resolve 2005, chapter 136 in adopting budgets beginning with the first fiscal year that begins after 6 months from the effective date of this section.
Sec. 18. 36 MRSA §3321 is enacted to read:
36 § 3321. Annual adjustment of tax rates
1. Generally. Beginning in 2003, and each calendar year thereafter, the excise tax imposed upon internal combustion engine fuel pursuant to section 2903, subsection 1 and the excise tax imposed upon distillates pursuant to section 3203, subsection 1 are subject to an annual rate of adjustment pursuant to this section. On or about February September 15th of each year, the State Tax Assessor shall calculate the adjusted rates by multiplying the rates in effect on the calculation date by an inflation index as computed in subsection 2. The adjusted rates must then be rounded to the nearest 1/10 of a cent and become effective on the first day of July immediately following the calculation if approved by the voters pursuant to subsection 5. The assessor shall publish the annually adjusted fuel tax rates and shall provide all necessary forms and reports to suppliers, distributors and retail dealers.
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