AUGUSTA, MAine — In what legislative leaders say is the last few days of this session, lawmakers will consider a bill sponsored by Rep. Emily Cain, D-Orono, changing the effective dates of the tax reform law that voters will consider repealing at referendum in June.
“This is a ‘what-if bill,’” Cain said. “If voters support tax reform, as I hope they will, the effective dates of the bill are all wrong. They were set before the people’s veto effort.”
The tax reform law was scheduled to take effect in January but has been suspended because of a successful petition effort led by Republicans. On June 8, voters will decide whether to repeal the suspended law or let it stand.
Cain, the co-chairman of the Appropriations Committee, is worried about an estimated $50 million hole in the state budget that will occur if the law is upheld and tax reform starts six months later than originally planned.
She said she has been working on the bill for several weeks to make sure the language does not violate constitutional provisions governing legislation suspended and awaiting the voters’ decision at referendum.
“This language has been well-vetted and discussed by the Revisor’s Office and the Attorney General’s Office,” Cain said. “They tell me this works.”
But Republicans are not as sure.
Sen. Richard Rosen, R-Bucksport, the GOP senator on the committee, said the bill needs a public hearing and the opportunity for the legal and constitutional issues to be thoroughly discussed. The measure was referred to the committee Friday, but no hearing has been scheduled.
“We need answers in three areas,” he said. “There are some real concerns about this bill coming in, in what is supposed to be the last few days of the session.”
Rosen is concerned the measure may have constitutional problems because of the pending referendum vote, and he wants a full explanation of the tax revenue implications of the law. He also is concerned that some may interpret the legislation as an attempt to influence the referendum.
“There are legitimate concerns that have to be answered about this bill,” Rosen said.
Attorney General Janet Mills said her office has reviewed the measure and believes it does not violate the Maine Constitution, although that opinion has not been given formally in writing.
“If it substantially amends a measure that is on the ballot now, that would be inappropriate,” Mills said. “What this does is say the effective date would be changed to accommodate the changes as the result of the referendum.”
Mills said the legislation is administrative in nature and addresses not tax issues but just a timing issue to avoid a budget problem that would occur if voters keep the tax reform measure.
Sen. Kevin Raye, R-Perry, the Senate GOP floor leader, said Republicans were not aware of the legislation until the ballot to allow it into the session was circulated among the 10 legislative leaders. He agreed with Rosen that it raises several questions that are likely to upset GOP lawmakers.
“When we talked about offering our tax plan, and when Sen. [David] Trahan, [R-Waldoboro], offered his proposal on meals taxes, we were told we could not do anything because of the referendum,” he said. “Now they are proposing a tax bill themselves.”
Raye said the measure could be interpreted as an attempt to influence the referendum and that will draw opposition from Republicans. Gov. John Baldacci said he supports the bill and that it is not an attempt to influence the referendum, but an attempt to avoid a special session after the June vote.
“This is being done so that if in fact the law is upheld you don’t need to call the Legislature into a special session to get the timing straightened out,” he said. “Taking care of this while they are in session saves the taxpayers the cost of a special session.”
Baldacci said the legislation is a common-sense approach to an issue the voters, not the Legislature, will decide. He said he expects the voters will back the tax reform plan, because it will lower their income tax rate and export more of the state’s taxes to visitors through an expanded sales tax.