AUGUSTA, Maine — Campaigns on both sides of the debate over the proposed Taxpayer Bill of Rights released conflicting reports Monday as to whether the ballot measure will help or harm Maine’s economy.
In Augusta, the conservative Maine Heritage Policy Center highlighted a report, titled “Rich States, Poor States” that ranked Maine as 47th in the nation in terms of economic outlook and 24th in economic performance this year.
One of the report’s authors, Jonathan Williams, said Maine would do well to follow the lead of Colorado and pass the government spending restrictions proposed by TABOR.
“Why we are putting this book together is to show how much taxes do matter at the state level,” said Williams, the director of a task force on tax and fiscal policy at the American Legislative Exchange Council.
TABOR opponents responded by releasing a report claiming that TABOR has hampered economic growth in Colorado and that the ballot initiative’s supporters are not telling the whole truth.
“I think when you really look at it apples to apples … it’s very clear that TABOR did not help the economy of the state of Colorado and it’s also very clear that TABOR did not help the quality of life of the state of Colorado,” said Robb Gray, state project coordinator for the Center on Budget and Policy Priorities.
TABOR, which will appear as Question 4 on the Nov. 3 ballot, would restrict increases in government spending to the rates of inflation and population growth. The proposal would require voter approval for tax increases or spending increases beyond the growth cap.
Supporters claim the restrictions will prevent overspending at the state and local level, thereby helping keep taxes down. Opponents predict the restrictions will hamstring government and force painful cuts in such areas as education, public safety and road maintenance.
Maine voters rejected a similar TABOR initiative in November 2006 as well as another spending restriction proposal in 2004.
The “Rich States, Poor States” report cited by TABOR supporters was conducted by the American Legislative Exchange Council, a nonpartisan association of conservative lawmakers that focuses on free markets, limited government and federalism. The report ranked Maine poorly in the areas of the personal income tax rate, total property tax burden, inheritance-estate tax and average workers’ compensation costs.
But the report was based on income tax and sales tax rates that are scheduled to be phased out next year under a tax restructuring bill that supporters claim will lower the tax burden for nearly 90 percent of Mainers.
That bill reduces Maine’s top income tax rate from 8.5 percent to 6.5 percent or lower for Mainers earning less than $250,000. To offset the losses from the income tax, the new system will apply the sales tax to more goods and services and raise the food and beverage tax from 7 percent to 8.5 percent.
Williams said the changes would not improve Maine’s showing in the report because the new system “just shifts around the taxes.”
But Gray accused the Maine Heritage Policy Center of misleading the public on TABOR’s supposed benefits in Colorado.
While it is true that Colorado’s economy has grown since 1992, the conditions that created that growth were in place well before TABOR took effect, Gray said.
Additionally, personal incomes have grown faster in Maine than in Colorado since 2001, according to data supplied by the Center on Budget and Policy Priorities, which focuses on fiscal policy issues that affect low-income families and children.
Maine also ranks higher in the annual Kids Count national survey of the well-being of children, has significantly lower student-to-teacher ratios and offers health coverage to more children than Colorado, Gray said.