Republicans attack tax overhaul

Posted June 19, 2009, at 8:24 p.m.

AUGUSTA, Maine — Several top Maine Republicans have filed an application for a referendum to challenge a newly enacted tax code overhaul.

The overhaul included an income tax rate cut, a broadening of the state sales tax to more items and an increase in the state meals and lodging tax. The ballot proposal, applied for late Thursday, would ask voters to repeal the entire package.

Republicans support the income tax rate cut, but organizers concluded that “it made more sense” to target the whole overhaul package, said one of the applicants, Maine Republican Party Chairman Charles Webster.

The overhaul passed the Democrat-dominated Legislature and was signed by Democratic Gov. John Baldacci.

Arden Manning, the executive director of the Maine Democratic Party, said Friday that Republicans’ opposition highlighted a clear political difference and characterized a repeal as a tax increase.

Maine’s “people’s veto” provisions in statute and in the state constitution allow for a referendum to overturn a law if opponents can collect enough signatures. Challengers need to get signatures from at least 10 percent of the number of people who voted in the last governor’s election.

An application must be filed with the secretary of state within 10 business days after the Legislature adjourns. The signatures must be filed by the 90th day after adjournment.

This year, the Legislature adjourned on June 13 and at least 55,087 signatures will be needed to force a statewide vote. People’s veto organizers will have to turn them in by mid-September.

Maine’s new and still-pending gay marriage law is already the subject of just such a petition signature drive.

Proponents say the pending tax overhaul package will reduce the tax burden on Maine residents by nearly $55 million.

It lowers the top income tax rate from 8.5 percent to 6.5 percent for income up to $250,000, and the top income tax rate for incomes above $250,000 from 8.5 percent to 6.85 percent. But the legislation also broadens the sales tax to include such items as car repairs and increases the meals and lodging tax from 7 percent to 8.5 percent.

Webster said Friday that the GOP is unhappy not only with the sales tax broadening and meals and lodging tax increase but also with other changes in the income tax.

For example, the overhaul package eliminates income tax deductions and exemptions while establishing certain tax credits. Some taxpayers would not want to see interest deductions eliminated from the tax code, Webster said.

Webster said he did not envision a high-spending referendum battle over the tax code.

“It won’t be a big budget, it’ll be a shoestring budget,” he said.

Besides Webster, application signers include Maine Senate Minority Leader Kevin Raye and Maine House Minority Leader Josh Tardy.

Manning said the Republican filing showed the party to be “out of step with the mainstream.”

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