May 26, 2018
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TABOR II bad for Maine

By Joe Perry, Special to the BDN

Sometimes you have to cut through the noise to get close to the truth. There has been a lot of noise around Question 4, TABOR II. Numbers, statistics and data have been tossed around by both sides. But it was The Economist, a well-respected financial magazine, that really brought things into focus recently for me.

It talked numbers too, such as from the National Kids Count book. “KIDS COUNT, a national survey of the well-being of children supported by the Annie E. Casey Foundation, ranks Maine 12th in the country in child well being. Colorado is ranked 22nd … 7 percent of Maine’s children under age 18 lack health insurance, as compared to nearly twice as high a share, 14 percent, in Colorado … In Colorado, K-12 student-to-teacher ratio is nearly 50 percent larger than Maine’s K-12 schools.” Personally, I find it hard to argue with an organization whose only agenda is what’s good for kids.

But it wasn’t the numbers but the common sense in the article that doesn’t get talked about much that appealed to me: “Colorado’s TABOR amendment wasn’t good for the state’s economy. It seems like common sense because Coloradans themselves voted to suspend it in 2005 — voted, that is, to make it easier to raise their own taxes. That’s a pretty clear signal that something was going wrong.”

A fact The Economist noted from another news source helps to clarify the situation as well. “Neil Westergaard, editor of the Denver Business Journal: “[Business leaders] have figured out that no business would survive if it were run like the TABOR faithful say Colorado should be run — with withering tax support for college and universities, underfunded public schools and a future of crumbling roads and bridges.”

By the way, it was an expensive campaign to suspend TABOR. The business community contributed 70 percent of a $10 million campaign to put TABOR on hold. That speaks louder to me than numbers around personal income, population and inflation in Colorado, depending on what year you pick.

Setting all of that aside, perhaps the most important piece that hasn’t been talked about much from either side is the “ratchet effect.” It was in Colorado’s TABOR and it’s in Maine’s TABOR proposal too. The ratchet is what led Colorado to suspend TABOR. What is the ratchet effect? I will let The Economist speak on that point: “The killer here was the ‘ratchet effect’: Tax revenues always fall in recessions, and the TABOR meant the state was unable to recover to pre-recession revenue levels. After revenues fell sharply in the 2001 recession, Colorado was unable to come back up to the necessary revenue level to fund the state’s educational and infrastructure needs.”

And maybe it was the summation from The Economist that made me think Question 4 is not such a good idea for Maine. It sounded like a big helping of common sense to me: “The experience of states around the country with constitutionally mandated taxation limits has been pretty disastrous. California, whose Proposition 13 pioneered the genre, is on the verge of bankruptcy 30 years later, unable to raise the taxes it needs to cover annual expenses because voters refuse to acknowledge that they must pay for the public services they receive. The effect has been particularly devastating on public education.”

And that article makes a pretty good case to vote no on Question 4.

Joe Perry of Bangor represents District 32 in the Maine Senate. He is the Senate chair of the Taxation Committee.

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