What would TABOR do?                     
It’s not too late to influence the vote


TABOR Impact Study: Fifteen communities look at 10 years of “what if”

(from Maine Townsman, October 2006)
By Liz Chapman, MMA

Capital improvements, reserve accounts and economic development efforts would be the first municipal spending to be sacrificed if the proposed Taxpayer Bill of Rights (TABOR) passes next month, according to officials who participated in a three-month study on the potential impact of Question 1 on local government in Maine.

The Maine Municipal Association study, released on October 4 — the first day of the MMA’s annual convention, involved in-depth financial and policy analyses by managers, finance directors and department heads in 15 communities across the state.

In every city and town, officials concluded that despite the rhetoric of supporters, the spending limits that would be imposed under TABOR would lead to severe service cutbacks over time, as well as immediately eliminating infrastructure investment and economic development efforts.

In some of the smallest and poorest communities, such as Milo and Eastport, cuts in direct services would be felt right away.

The study, titled “Back to the Future,” asked municipal leaders to go back through their budgets over the past decade and use the estimated TABOR spending limits to speculate how TABOR might have impacted their communities through the period. Specifically, what their towns might look like today had TABOR been in force from 1995 to 2005.

By doing a thorough review, the municipal leaders also were able to draw a roadmap showing what would likely be sacrificed in the future should TABOR pass on November 7.

“TABOR would have prevented all we have accomplished and caused a community who has done it right to falter at a time when the future looks brighter than it has for 50 years,” Eastport Town Manager George “Bud” Finch said after his look-back review.

“Eastport adopted a totally different strategy for economic development 10 years ago and it is just now beginning to bear fruit – fruit that could rot on the tree if TABOR passes,” Finch added.

All of the municipal officials concluded that they would not recommend, nor would their councils and selectmen, cutting direct services in order to salt away reserve funds for capital improvements or major equipment. Ditto for economic development investments and the tax increment financing that often helps make a project viable, officials said.

“The stymied economic growth, deteriorating streets and parks and reduced direct services to the public would continue until things get too bad and people begin saying, ‘We need to fix this,’” Brewer City Manager Stephen Bost said in his TABOR analysis, which shows the city would have lost $2.5 million in spending power over the 10-year analysis period.

“In the meanwhile, however, the city will lose much of the ground it has gained in recent years,” Bost added, “and its return on investment, rather than expanding, is likely to shrink.”

In Lewiston, where the city has invested millions to rehabilitate its downtown and attract new jobs to the state’s second largest community, officials shake their heads at one of the most severe implications of TABOR.

“We could have all the economic development in the world. It’s not going to help us under TABOR,” said Finance Director Richard Metivier, who underscored that TABOR would not allow communities to capture the financial benefit of new tax base growth.

Metivier said the natural growth in property tax revenue from an expanding local economy has helped to keep the city’s tax rate stable at about 27 mills for the past 10 years.

Lewiston would have been among the hardest-hit communities had TABOR been in effect over the past decade, losing almost $8 million in spending power.

Although leaders in all 15 study communities said they would protect public safety first, they also concluded they could hold off police, fire and rescue service cuts only for so long.

Many of the officials in the study communities were unaware until their separate reviews of the proposed law that TABOR would shift certain budget decision-making to the minority. By requiring that any increase in spending over the TABOR limit or any new taxes or fees be approved by a two-thirds vote of the legislative body, TABOR could result in one-third of voters having veto power over the other two-thirds at town meeting.


After capital improvements and economic development, the study participants in all 15 communities said “non essential” services would be the next victim of a shrinking municipal budget.

Those services would include recreation programs, public library hours of operation, and annual funding to all so-called “outside agencies,” which range from the American Red Cross to the local food pantry to Hospice programs.

Contributions to community festivals, holiday parades and other special events also would be totally eliminated, the officials said.

Other non-essential budget items that would be cut include donations to veterans’ memorials, and upkeep of sports fields, town parks and cemeteries, municipal officials said.

After the non-essential spending is eliminated, the officials said they would be forced to look at crucial public services and do the best they could to mitigate the impact on residents.

But in some communities, that will be tough. In Milo, Town Manager Jane Jones said direct service cuts would be noticeable almost from the start because the town has so few non-essential budget items.

Jones said she and selectmen would cut everything but winter plowing and public safety should TABOR pass.

“I think the town is going to find they’ve made a mistake in voting for it,” said Vassalboro Town Manager Michael Vashon, who said TABOR spending limits would quickly force his small community to stop paving gravel roads, delay or eliminate replacing basic firefighting gear, and cut 50 percent of the highway crew. For starters.

“The impact would have been severe,” Vashon said.

Quality of life

The municipal officials who participated in the study were most concerned about maintaining essential, critical services to their residents. However, they also worried about trying to maintain the quality of life some communities have worked decades to achieve.

For example, Milo offers curbside trash pickup, one of the most popular services local government provides its residents in terms of both convenience and keeping the town clean. That service would likely be among the very first to go, Jones said.

Had TABOR spending limits been in force over the past decade, the town of Bucksport would look far different than it does today, said Town Manager Roger Raymond.

Assuming a TABOR override was not done, even though voters strongly supported a community center, recreational walking trails around Silver Lake, a performing arts auditorium and new sports fields – all projects that were funded with surplus, reserves or grant monies, these projects would never have been completed.

The town of Freeport also would have considered dropping plans to build a new performing arts center and major renovations to the high school and middle school. The land buy that gives residents access to the water also would have been considered for elimination. The new community center probably wouldn’t be standing, either.

And the town would likely have foregone creating a special TIF district to keep the village sidewalks and streets looking as good as the specialty stores that line the downtown, including retail giant L.L. Bean.

The bottom line

Following is the conclusion of the 15-town effort as it appears in the report. The entire report is available on the MMA’s Web site at; or by calling or emailing a request for a copy. The report includes the 8-page summary, along with each of the individual 15 town reports.

“The proposed TABOR referendum is unnecessary and ill-advised for local government in Maine, where town meeting voters already have total spending power over the annual budget in more than 90 percent of the state’s 489 municipalities.

The TABOR referendum was brought to the ballot despite the passage of LD 1 just two years ago, which establishes spending limits for schools and state and local government. L.D.1 also directs the Legislature to develop a plan to get Maine’s tax burden into the middle of the pack nationally.

The TABOR initiative simply sets spending limits, but contains no provision or plan for tax burden management. Municipal officials said the new spending law known as L.D. 1 has not had time to take full effect in most communities, rendering TABOR premature at best.

Meanwhile, TABOR spending restrictions would hurt the poorest of Maine communities the most and do nothing to address the core problems associated with Maine’s tax system, which most people agree needs more reform.

Larger or wealthier communities could delay the more noticeable service reductions for only a few budget cycles.

The longtime Yankee trait of salting away money for both emergencies and anticipated future costs would be lost under TABOR because municipal officials in all of the 15 study towns said they would never support cutting essential services to residents so that they could save toward a fire truck or snow plow.

Municipal officials also agree that TABOR would punish the sound fiscal practices and policies on the local level.

They also are acutely concerned that they will be doubly injured should state government reduce municipal revenue sharing or K-12 education funding in an effort to meet its own TABOR spending goals. Under that scenario, the cuts outlined in this report, and those detailed in the individual town TABOR reports, would only be a starting point for further cuts at the local level.

Municipal officials believe the TABOR measure would change the face of their communities by putting off infrastructure repairs and upgrades, draining savings accounts, discouraging or eliminating long-range planning, reducing services and programs, and jeopardizing public safety and schools.

At all government levels in Maine, TABOR would shift power to a minority of voters who do not share the basic concerns and opinions of the mainstream majority, making Maine far less democratic as a result.”


What would TABOR do? (sidebar)

The proposed Taxpayer Bill of Rights, known as TABOR, is a citizen-initiated referendum that will appear as Question 1 on the November 7 statewide general election ballot.

The Maine TABOR proposal sets spending limits for all levels of government: state, municipalities, counties, schools and utility districts (water, sewer, solid waste, etc.).

Only the state of Colorado has adopted TABOR. In November 2005, a dozen years after enacting the spending limits, Colorado voters suspended key provisions of the law, including their annual tax rebates for the next five years, in order to rebuild the state’s infrastructure, public safety services and education programs.

For local government in Maine, the proposed TABOR would:

1.) Establish a municipal spending limit equal to the more restrictive of two formulas: (1) the rate of inflation adjusted by the annual change in town population (positive or negative), or (2) the percentage change in assessed value (positive or negative).

2.) Set spending limits on schools based on the rate of inflation adjusted by the annual change in student enrollment, whether positive or negative.

3.) Require a two-thirds vote by the community’s legislative body to spend above the annual TABOR limits. For 90% of Maine’s municipalities, the legislative body is the annual town meeting. If the two-thirds vote of the town meeting is achieved, TABOR then mandates a follow-up community-wide referendum vote. If the two-thirds vote is not achieved, the town could not adopt the budget even by referendum.

4.) Require the same two-thirds vote and mandatory referendum process in order to adopt a budget that increases either the town’s property tax rate or any local fee by a penny or more even if that budget is otherwise fully compliant with the TABOR allowance.

5.) Mandate a new and expensive process for notifying voters of an impending TABOR referendum, including a special mailing to every registered voter that would contain four-year projected budget impact data and two summaries of up to 500 words, one in support of the proposed budget and one in opposition to the proposed budget.

6.) Authorize both individual and class action lawsuits against the municipality for noncompliance with any TABOR requirements, with the municipality required to pay the plaintiff’s attorney fees if the town made an error.


It’s not too late to influence the vote (sidebar)

You still have time to get information to voters about the impact of the proposed Taxpayer Bill of Rights (TABOR) on your community before the November 7 general election.

Here are some tips to consider in the final weeks before the vote. The Maine Municipal Association can help with financial analyses and public education efforts used to communicate your concerns to residents.

• Hold a community forum to talk directly to residents. Call the reporters who typically cover your town and ask for coverage. If you do not get regular press coverage, call the newspapers in your region and ask for coverage.

• If you have a council or selectmen’s meeting before the election, put TABOR-related topics at the top of your meeting agendas to ensure reporters are still around when the topic comes up and can write about it. Points you can make to reporters include:

— Emphasize why certain aspects of TABOR would not work well for your town, such as the use of population change on the municipal budget and student enrollments on the school budget.

— Emphasize that TABOR would allow one-third of voters to block the wishes of the other two-thirds.

— Emphasize that even if your town budget remains below the TABOR-imposed spending limits, any proposed increase in taxes, fees or debt would still be subjected to the two-step “override” procedure.

• Call a news conference and ask key town government leaders, particularly police and fire/rescue chiefs, public works directors and recreation directors, to outline current budget constraints and the potential direct impact of TABOR on emergency services.

• Highlight the services and programs that might never have been proposed or approved under a TABOR budget process.

• Highlight the programs and services you believe will be especially at risk if TABOR passes.

• Demonstrate that local government spending is not out of control in your community and that your residents already have the power — and use it — to control spending and taxes.

• Write a guest column for either the daily or weekly papers that cover your region. Check on the deadline for printing election-related writings. It is typically a week to 10 days before the election.

• Recruit respected and articulate community leaders, in both the business and legal sectors, and also some of the longtime and best-known community volunteers and ask them to speak to civic and other groups who invite speakers to their meetings.