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Question 1 camps gather support of heavy hitters

Posted June 06, 2010, at 8:31 p.m.

AUGUSTA, Maine — The campaigns battling over Question 1 on Tuesday’s ballot announced a slew of additional endorsements over the weekend as the race entered its final days.

The Yes on 1 campaign gained the support of the board of directors of the Greater Portland Convention and Visitors Bureau, which has more than 400 member businesses, largely in the hospitality industry.

By voting yes on Question 1, voters will support repealing the 2009 tax restructuring law that lowers Maine’s income tax rate, increases the meals and lodging tax, and applies the sales tax to previously exempt goods and services.

The Convention and Visitors Bureau joins more than two dozen other trade groups supporting the Yes on 1 campaign, including the Maine Merchants Association, the Maine Tourism Association, the Maine Restaurant Association and the Maine Association of Realtors.

The No on 1 campaign, meanwhile, picked up the endorsement of former Gov. Angus King and the Maine Today Media chain, which owns the Portland Press Herald, the Kennebec Journal and the Waterville Sentinel. The Bangor Daily News editorial board previously had endorsed the No on 1 campaign.

Several business organizations also are urging Mainers to vote no on Tuesday. They include the Maine State Chamber of Commerce and the Bangor and Portland regional Chambers of commerce.

In a statement, King said he believes voting no will help attract new jobs to the state by lowering Maine’s income tax rates.

“Businesses across the state have looked at this question and have decided that no is the right vote, and I agree,” King said. “There’s no question that it will make us more competitive. If you want lower taxes — especially income taxes — don’t be confused, vote no.”

Gov. John Baldacci also used his weekly radio address to urge no votes on Question 1, calling the tax reform law “good for working families, the elderly and businesses.”

He expressed support for the four bond proposals, which total $108 million for projects ranging from highway, rail and port improvements to wind power development.

The tax law passed by the Legislature in 2009 restructures Maine’s tax code in three major ways:

• First, it would reduce the top income tax rate for Mainers earning less than $250,000 a year from 8.5 percent to 6.5 percent. Those earning more than $250,000 will see their income tax rate drop from 8.5 percent to 6.85 percent.

• To recoup those revenues, the law would apply Maine’s 5 percent sales tax to more than 100 previously exempt goods and services, from movie and amusement park tickets to car repairs.

• Last, the bill would increase Maine’s meals and lodging tax from 7 percent to 8.5 percent.

The end result of those changes, according to supporters, is that more than 95 percent of Mainers will pay less in taxes over the year while tourists and other visitors will shoulder more of the tax burden. Supporters claim the new structure also broadens Maine’s tax base by reducing the state’s reliance on income taxes and sales taxes on new cars, both of which shrink when the economy sours.

The Yes on 1 campaign, however, contends the changes will take more money from Mainers while harming the state’s tourism economy. Critics also accuse the tax restructuring plan’s proponents of overstating how many Mainers will see a tax cut as a result of the law.

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