Tax Referendums Rejected
Both of the tax issues on the ballot were overwhelmingly rejected last night, as Mainers voted to preserve the status quo in this area. The initiative to cut the excise tax was overwhelmingly defeated by about a 74%-26% margin. The Taxpayers Bill of Rights was closer, but still failed by about a 60%-40% margin – not even as close as 2006. The surprise wasn’t that these initiatives failed (in TABOR’s case for the second time) but that they failed by such a large margin.
It would be a mistake to interpret these results as meaning that Mainers aren’t concerned about fiscal issues or taxes. These are still important issues and are likely to be major topics in next year’s gubernatorial election. This will be especially true if a people’s veto of the tax reform bill is placed on the June 2010 ballot along with the party primaries.
It is clear, however, that Mainers have rejected the approach presented in these two citizen initiatives. That is, after all, what was being voted on last night – not the general issue of taxes. For TABOR it was especially stinging, as they believe they’d made enough changes from the 2006 version to win over Maine. However, until the last moment the TABOR Now campaign did not effectively enunciate those differences. The changes should have been highlighted earlier and more frequently by the TABOR Now campaign. They also would have been wise to significantly narrow the scope of the referendum. If TABOR focused on state government, and did not effect local government that mainly funds education, the opposition would have had to run a very different campaign.
The excise tax, while interesting, was not so much a tax cut as a tax shift. Many municipalities would likely have simply raised their property taxes to make up for their lost revenue, and the “No” campaign effectively made this argument. While the excise tax is unpopular, it is far from the most burdensome tax in the state. Moreover, the More GREEN Now campaign never effectively made their environmentalist argument – difficult with the Maine Green Independent Party opposing the referendum. Indeed, only one prominent Green endorsed the effort, Pat LaMarche. More GREEN Now would have been wise to draft the referendum in concert with a wider cross-section of prominent environmentalists if they really wanted to make that argument.
The real lesson from the failure of these referendums is that Mainers seem to have widespread confidence in their local governments to wisely spend their money. While the state is willing to vote by wide margin against sending new tax revenue to Augusta, we are not willing to cut support to our local communities. The opposition to the initiatives focused on the harm that would be done to schools and municipalities, and Mainers seem to have bought that argument.
Mainers have rejected these individual pieces of legislation, not shown a lack of concern about taxes. Governor Baldacci and legislators from both party seem to recognize this, as a proposal by the Maine Education Association to fund education through an increase in the sales tax did not win many positive comments last week from elected officials. As negotiations begin on the supplemental budget, continued fiscal constraint would be wise.
