Judge clears way for tax reform vote

Posted Dec. 24, 2009, at 6:28 p.m.

AUGUSTA, Maine — A Superior Court judge has dismissed a case seeking to invalidate thousands of petition signatures gathered by opponents of a recent tax restructuring bill passed by the Legislature.

Justice Donald Marden’s ruling, combined with a related decision earlier this week, effectively clears the way — absent a successful appeal — for a June 2010 vote on the latest attempt to revamp Maine’s tax code.

The tax reform bill, approved largely along a party-line vote last spring, lowers Maine’s top income tax rate from 8.5 percent to 6.5 percent for all Mainers earning less than $250,000 a year, although many will pay even less. To make up for the lost income tax revenue, the bill applies the sales tax to more goods and services and raises the meals and lodging tax from 7 percent to 8.5 percent.

Supporters claim that roughly 90 percent of all Mainers will see a tax cut under the bill, with tourists and out-of-state visitors shouldering more of the tax burden. But critics, led by Republican lawmakers and Maine GOP chairman Charlie Webster, predict the new sales taxes will harm the poor and the elderly while discouraging tourism.

On Monday, Marden had ruled that Secretary of State Matthew Dunlap had taken too long to review the petition signatures and, therefore, had lost his authority to make a decision on the validity of the petitions. Dunlap acknowledged the delay but said his office’s first obligation was to stage the Nov. 3 election featuring seven ballot questions.

The Monday ruling did not affect the people’s veto initiative, which Dunlap already had certified for the June ballot, albeit belatedly. But Marden’s decision nonetheless was seen as a policy victory for the Maine Republican Party, which had sued the secretary of state for failing to meet the deadline.

In Wednesday’s ruling, Marden rejected Charles Johnson’s arguments that Dunlap had wrongly certified as valid nearly 9,700 signatures gathered by the Maine GOP and other critics of the tax reform package.

Johnson, a supporter of the tax restructuring bill from Hallowell, had alleged that a public notary who notarized thousands of the petition signatures had a conflict of interest because he had been paid to help gather signatures.

Johnson also challenged the thoroughness of the review conducted by Dunlap’s office, alleging some signatures should have been tossed out because they were either illegible, had questionable dates or the signers were not in the Central Voter Registry.

In his written decision, Marden noted that his earlier ruling had effectively rendered the Johnson case moot. But he deliberated on the matter in case an appeal of the earlier case is successful.

Marden wrote that, despite the delay, “the court is satisfied that the agency decision of the Secretary of State in this matter is founded upon constitutional and statutory provisions” and that Dunlap’s office followed “lawful procedure.” And that the decision was not affected by “bias or error of law,” Marden wrote.

Dan Billings, an attorney representing Maine GOP chairman Charlie Webster in the cases, applauded both decisions and pointed out that opponents of the ballot measure would have to be successful on two appeals to block a June vote.

“I think the likelihood of that happening is slim,” Billings said.

But Billings said the earlier decision about what happens when the secretary of state misses a deadline was especially notable from a policy standpoint.

“It let’s the secretary of state know and also lets the Legislature know that if these decisions aren’t made in a timely basis, in the future it will go directly to the voters,” Billings said.

Rep. John Piotti, the House majority leader and one of the key architects of the tax reform bill, called Marden’s ruling on the deadline “a terrible precedent” and said he hopes an appeal, if filed, would be successful.

Piotti, D-Unity, said the entire process has been frustrating for supporters of the tax reform effort.

If it weren’t for the people’s veto, the vast majority of Mainers would see their income taxes lowered on Jan. 1 under the tax reform bill. Those tax cuts have been put on hold, however, pending the result of the June referendum, Piotti said.

kmiller@bangordailynews.net

623-0024

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