MMA Letter on Palesky Tax Cap Proposal – The following is a letter from MMA in regards to the Palesky 1% tax cap proposal that will go before the voters this year at some point. To give you an explanation of what that would mean today if it was passed, our mill rate would drop to $10 per thousand dropping the amount raised from taxes from $2.05M to about $680K. It is easy to see how the prolonged battles in communities dealing with tax relief are going to create support for this bill, people are becoming desperate and feel their government is not addressing the taxing issues.
Dear MMA Members,
As you are well aware, Carol Palesky and the Maine Taxpayers Action Network have secured the necessary signatures to place their tax cap proposal on the ballot. The Palesky Proposal scales back assessed property values to their 1996 level, allows for certain interim adjustments for construction and sales, and imposes a property tax cap of 1% - or 10 mills – on that 1996 base, with an allowance to cover some pre-existing debt.
The Palesky Proposal is entirely excerpted from California law – it was known as “Proposition 13” – and contains dozens of provisions that do not coincide with Maine law. In fact, not only are the provisions inconsistent with State law, they are often in direct conflict with themselves, the Maine Constitution, or both!
Because of these conflicts it is very difficult to perform a pinpoint analysis of the impact on municipalities. The best that can be done is a “best-case” and “worst-case” financial analysis of the impacts.
The “worst-case” scenario reveals the impacts of the Palesky Program as written, and indicates that the result would be the loss of $950 million in municipal property tax revenue in FY 06, representing 48% of the property tax resources that towns and cities would otherwise collect to provide basic governmental services.
Under the “best-case” scenario, which assumes that large segments of the proposal will be deemed unconstitutional, the municipal tax revenue loss in FY 06 would be $594 million, representing a 30% reduction in property tax revenues.
Under this website link you will find MMA’s best effort to provide a town-by-town “best case” and “worst case” impact analysis. Each analysis is performed as though the Palesky Proposal was law during 2002, which is the last year for which we have the actual “full value” assessment base for each municipality in Maine. Each analysis also describes in detail the assumptions made and modeling employed to calculate the individual municipal impacts.
We urge the boards of selectmen, councils, municipal assessors and other local officials to carefully review these impact analyses and replace the modeling assumptions, where feasible, with actual local data. To assist in that effort, we have also included in this website link a worksheet that should serve as a guide for each municipality to calculate the impacts of the Palesky Proposal as accurately as possible.
We hope that each municipality will:
Take the time to identify the Palesky Proposal impact for your municipality, either by relying on the information for your community in the MMA spreadsheets or developing a more municipal-specific impact analysis using specific local data.
Actively share this information with your elected officials, school board members and staff, and with your local citizens.
Also, share this information with your weekly and daily newspapers. Take the time to explain the implications and the severe impacts of the Palesky Proposal on your community.
Encourage your elected officials and school officials to write a letter-to-the-editor expressing opposition to the Palesky Proposal.
Consider preparing a “side-by-side” comparison of your existing or proposed budget and that same budget under the Palesky Proposal. We suggest outlining the cuts in municipal services necessary under the proposal and sharing that information with voters in your community.
Please share your local analysis with MMA. You can fax the information to Kate Dufour at 207-626-3358.
Regardless of which scenario you focus on – the “best case” or “worst case” -- the Palesky Proposal impacts on municipal services statewide would be devastating. The proposal also significantly limits the ability of municipal government to replace lost revenue. It would effectively take away the ability of Maine citizens to self-govern.
We cannot emphasize enough the importance of municipal officials taking action. This heavy-handed proposal could pass. It is a dramatic threat to the way we govern in Maine. It is critical that each community calculates the impacts and shares that information with your residents.
We will continue to provide breaking information about this key issue on the MMA website. Please monitor the site for the latest information.
Sincerely,
Chris Lockwood
Executive Director
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