Citizens Support State Tax System Overhaul
(from Maine Townsman, March 1997)
By Stephen Gove, Director of Communications & Health Trust Services, MMA

When you want to find out what Maine people really think about an issue, you ask them. That’s exactly what the Maine Municipal Association did.

In July 1996, MMA commissioned a survey of Maine citizens to gauge public attitudes on a broad range of tax issues. MMA found out that citizens want change and seem to have a very good grasp on the direction of that change even though they do not totally understand the confusing, existing tax structure or why it is so confusing.

MMA decided to dig deeper and ask some more questions and in December 1996 commissioned a second survey to gauge citizens’ attitudes about various tax reform approaches. That second poll told MMA that there is strong support for an overhaul of the present Maine tax system and that people are prepared to vote on such an overhaul in 1997.

Command Research, a national independent polling firm, conducted both surveys. The firm surveyed 600 Maine citizens for the first poll in July. Four hundred Maine citizens were surveyed for the second poll in December. Based upon these numbers, both polls have a high level of statistical significance.

The major findings of the July 1996 poll include:

77% of those surveyed believe that "we need a major overhaul of the entire tax situation."

Only 20% of those surveyed believe that the tax burden is currently "just about right," 64% say it should be reduced. 35% say it should be reduced by 10%, while 28% want it reduced by 20% or more.

74% believe that all voters in the state should have an opportunity to vote on any proposed changes or major restructuring of the tax situation.

65% of those surveyed believe that the state and local governments in Maine should rely more on sales and income taxes for funding than on property taxes.

There is major concern over the property tax and the way it is currently being used to fund education.

72% say that "state income and sales taxes should be used to fund local education instead of relying so much on property taxes."

67% agree that "property taxes can no longer pay for most of the cost of education in Maine."

Property taxes are regarded as the most objectionable tax by a 2.5 to 1 margin over either the income or sales tax.

64% wanted "to make sure that the state’s expected $200-$400 million shortfall is not funded by increases in the property tax.

Some possible improvements favored by Maine citizens:

Make tax exempt organizations pay for local services such as police, fire and trash (61%).

Close current sales tax exemptions.

Reduce the number of organizations and non-profits which are exempt from paying property taxes and tax them the same as others (56%).

The major findings of the December 1996 poll include:

Maine people would like to see an overhaul of the tax system.

91% would like to see the new Legislature try to make the present system fairer and more equitable. 74% favor this strongly.

80% of those surveyed say that the public should get to vote on the resulting Tax Reform Act of 1997, and 91% said they would vote in such a referendum.

While most Maine people do not have a working knowledge of all aspects of tax policy, their choices for the direction of change are clear:

83% want the total tax burden to be no higher than it is now, no matter what the Legislature decides to do.

Overall, Maine people want less reliance on the property tax:

78% say that the Legislature passes too many laws without paying enough attention to what they will cost on the local level.

71% believe that Maine currently shifts too many costs to local property taxes.

64% want the state to pick up a larger share of the costs of education through the sales or income tax instead of the local property tax.

Citizens want the Legislature to take a hard look at existing property tax and sales tax exemptions:

72% say they favor reducing the number of sales tax exemptions, if it would reduce the sales tax rate.

71% would like to require private schools, churches and exempt organizations to pay for municipal services such as fire and police protection and trash removal.

64% favor the elimination of exemptions on such items as ski lift and concert tickets.

64% say they would reduce the number of exemptions knowing that they currently cost the state $700 million annually.

55% favor reducing the number of property tax exemptions for private schools, hospitals, service clubs, and other non-profit organizations.

MMA didn’t ignore what citizens had to say in these independent polls. The major property tax reform proposal supported by MMA and Speaker of the House Elizabeth H. Mitchell, as lead sponsor, is just what citizens say they want. They want less reliance on the property tax, they want a fairer and more equitable tax system, they want fewer sales tax exemptions, they want tax exempt properties to pay for municipal services, they want the overall tax burden to be no higher than it is now and they want to vote on a tax reform measure in 1997. The proposal, An Act to Comprehensively Realign the Tax Structure of the State, creates a tax structure which incorporates these citizen desires.