Catalyst for Action

(from Maine Townsman, February 2005)
By Chris Lockwood, MMA Executive Director

I want to thank municipal officials across the state for your efforts in support of “The School Finance and Tax Reform Act of 2003,” the citizen initiative (commonly known as Question 1A) adopted by Maine voters on June 8, 2004. Your determination and hard work have kept property tax reform at the forefront of issues demanding attention and certainly have served as a catalyst for action.

While much attention has been focused on the recent enactment of LD1, the Governor’s proposed bill and the work product of the Joint Select Committee on Property Tax Reform, media accounts seemed to downplay the correlation between these efforts and the implementation of Question 1A. I believe it is instructive to view the enactment of LD 1 in a broader context.

From a municipal perspective, the enactment of LD 1 might be described as a milepost, but not the ultimate destination, in a journey that traces back many years. Throughout the late 1980’s and 1990’s, the Maine Municipal Association made repeated efforts to work with the Legislature and Governor to address longstanding tax policy and education funding issues. Although certain gains were made, the core problems remained and became more acute, particularly with an increasing shift onto the local property tax for funding of K-12 education costs.

A major leg of the journey began in the summer of 2002 with the appointment of an 18 member MMA Tax Reform Steering Committee. Using several proposals as working models, the Steering Committee ultimately developed “The School Finance and Tax Reform Act of 2003”. A central focus of the proposal was to require the State to honor its commitment to fund 55% of the costs of K-12 education. Other important goals of the initiative were to provide a political directive to the Legislature to undertake revenue neutral tax reform, to create incentive funds for the more efficient delivery of municipal and school services, and to establish a plan to reduce Maine’s state and local tax burden. This proposal was unanimously endorsed by the Steering Committee, the MMA Executive Committee, the MMA Legislative Policy Committee, and by the general MMA membership at the October 2002 annual business meeting.

Municipal officials took a lead role in the gathering of a record number of signatures (over 100,000) on the November 5, 2002 election day. This measure became known as Question 1A when the Legislature put forth a competing measure, Question 1B, in August, 2003. Question 1A received a plurality vote (38%) in November, 2003 and was ultimately adopted by a 55%-45% margin in the June 8, 2004 run-off election. Immediately following the June 8 vote, Brewer city officials undertook a grassroots effort resulting in the adoption of resolutions by municipal boards and councils across the state committing to ensure property tax relief from new State funding of education.

These efforts set the stage for the newly-elected 122 nd Legislature to implement the citizen initiative adopted by the voters on June 8. LD 1 represents the Governor’s, and ultimately the Legislature’s, response to implementing the School Finance and Tax Reform Act of 2003, which became operational Maine law on January 14, 2005. Enactment of LD 1 amends and replaces this citizen-initiated law.

For many municipal officials and citizens who campaigned for adoption of Question 1A, the enactment of LD 1 falls short of their vision of how this initiative would be implemented and is understandably a cause for disappointment and frustration. This is certainly the case for many of us who have worked so strenuously on this effort.

On the other hand, the commitment of an additional $96 million in State funding for K-12 education funding in FY06 is certainly noteworthy in light of the overall State budget situation, as is the additional funding for the circuit breaker program. If viewed as a continuum in a long and difficult journey, the Legislature has now enacted a statutory ramp to get the State to 55% funding of K-12 education over a four-year period.

Clearly more work remains to be done, including a more comprehensive approach to tax reform, but it is apparent that municipal officials have collectively provided a catalyst for action on these important issues. On a daily basis you strive to provide solid value and services to the citizens and businesses in your communities, but you are constrained to work within the tax structure established by the Legislature. You deserve recognition for your efforts and your commitment to work constructively as partners in our intergovernmental system. Thank you for your dedicated service.