News

Orono town council tackles TABOR II

Posted on Sept. 24, 2009, at 1:23 a.m.

The Orono town council dove into “An Act to Provide Tax Relief,” a citizen’s initiative more commonly known as TABOR II, during a Sept. 21 meeting, sparking ardent debate about its consequences. The council members also talked briefly about the excise tax ballot question.

TABOR II, if enacted, would impose restrictions on Maine that would trickle down to affect small towns, according to Catherine Conlow, Orono’s town manager. Current law governing municipalities allows them to carry over any remaining funds from their previous year’s budget into the new one. Under TABOR II, those funds would not be allowed to be carried into the new fiscal year, negating any town’s ability to build up a reserve of money.

“Big impacts to the municipality come in if they’re going to cut state services. Those service cuts are going to trickle downhill,” Conlow said. “One of the direct impacts is that it mandates referendum voting on the town.”

TABOR II requires voter approval for revenue increases and expenditure increases above the limit it sets for towns and the state. It also requires any relevant information and notices to be sent to every registered voter in the state prior to any statewide referendum vote. The direct costs associated with a referendum vote are $800,000, according to a report by the Maine Municipal Association.

“And you know what they’re going to do with it?” asked councilperson Lianne Harris, who answered herself by making a throwing-away gesture. Councilperson Thomas Perry exclaimed “Jesus Christ” when the mailing requirement was mentioned.

Municipal costs of mailing the notices would be around $1 million, according to the Maine Municipal Association’s report.

“TABOR II is going to add to the mil rate, too,” Conlow said.

The mil rate is the number the town uses to determine property taxes.

Geoffrey Gordon, the council chairman, asked whether the state could overrule TABOR II.

“The state has often changed its own requirements when regulations are put on it,” Conlow said. “It would take TABOR II, if it were passed, and then find some way to work with it.”

TABOR II would place restrictions on the authority of voters at town meetings, city councils, county boards and county budget advisory committees, according to the association’s report.

The council members also touched on another citizen referendum to be on the November ballot — an initiative to eliminate the automobile excise tax. Conlow said she expected the tax’s elimination would cost Orono $260,504 each year and increase the town’s mil rate by 0.62 percent. Conlow said revenue from the excise tax is usually used for public works projects such as roads.

“Our total budget for maintenance and care of our roads … is over a million dollars,” Conlow said.

Proponents of the initiative argue the excise tax is unnecessary because towns often use less money in their public works budgets than the tax provides, but Conlow said that isn’t the case with Orono.

“Our operations cost us significantly more than our excise tax collections,” Conlow said.

Conlow added that Orono saw a slight improvement in tax revenue because of the cash for clunkers program.

Maine Leads is the nonprofit advocacy group leading the effort to pass TABOR II and has collected signatures that account for its place on the November ballot. The Maine Heritage Policy Center wrote the initiative.

Mainers voted to reject TABOR II’s predecessor, TABOR, in 2006.

The council decided to hold a public information session on both the impact of TABOR II and the excise tax referendum on Oct. 19.