220 Million Reasons Why the Taxpayer Bill of Rights Helps Maine’s Beleaguered Taxpayers

Read the full report | On November 7, 2006, the citizens of Maine voted for a Taxpayer Bill of Rights (TABOR). Unfortunately, the initiative failed, but only by 4 percentage points (54 percent opposed to 46 percent in favor)—or a swing of only 20,899 votes.

After the close TABOR vote, the 123rd Maine Legislature was seated amid promises to cut spending and lower taxes.  Two years later, however, the Legislature had increased taxes by $220,169,693 through FY 2011 (see Chart 1). To put it another way, the tax increases just since the 2006 TABOR vote will cost the average Maine family of four $677 over four years. Beyond 2011, the tax bill associated with these tax increases will continue to grow.

However, it has not been all bad news for Maine’s taxpayers. One of the 123rd Legislature’s tax increases was to replace the so-called “Savings Offset Payment” tax with a hodge-podge of taxes on health insurance, soda, beer and wine costing taxpayers a net tax increase of $17,264,932 in FY 2009, $24,618,517 in FY 2010 and $25,940,608 in FY 2011.

In response, affected citizens and businesses successfully put a “people’s veto” of these tax increases on the November ballot. Mainers responded with a resounding defeat of these tax increases with 64 percent voting against it. As a result, the figures in Chart 1 have been somewhat reduced, but only through the herculean actions of Maine’s citizens. This does not negate the fact that it was the Legislature that initially voted to put these tax increases into law.

The moral of the story is that Mainers relish the opportunity to decide for themselves whether or not they wish to be burdened by higher taxes. Yet, under the current system, Mainers’ only option is to go through the cumbersome and expensive “people’s veto” process. Why shouldn’t this option be automatic for all tax increases?

Fortunately, a new Taxpayer Bill of Rights will be on the November 2009 ballot which, if enacted, would automatically give Mainers a voice over their tax bill.

About the author

J. Scott Moody is the Chief Executive Officer of MHPC. Scott has over 15 years of economic policy research and economic modeling experience from his work with The Tax Foundation and The Heritage Foundation. He has authored and co-authored over 150 published articles and books. He has testified twice before the House Ways and Means Committee of the U.S. Congress.