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Cumberland Town Council opposes excise tax, TABOR referendums

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Cumberland Town Council opposes excise tax, TABOR referendums

CUMBERLAND — The Town Council on Monday announced its opposition to two state ballot questions going before voters on Nov. 3.

The panel unanimously approved a resolution opposing excise tax reduction, Question 2. A 5-2 majority favored a resolution against the second so-called Taxpayer Bill of Rights, Question 4.

Council Chairman Ron Copp joined Councilors Michael Perfetti, William Stiles, Jeffrey Porter and Stephen Moriarty in support of the anti-TABOR resolution, while Vice Chairman Shirley Storey-King and Councilor George Turner voted in the minority.

TABOR II asks voters if they want to change the existing formulas limiting state and local government spending, and require voter approval via referendum for spending that exceeds those limits and for increases in state taxes. Since 2007 Cumberland and other Maine municipalities have operated under the LD 1 state law, which limits how much the property tax can rise in a given year, and which requires a vote by the local governing body to exceed the limit.

Town Manager Bill Shane gave a presentation on both ballot questions, supported by data from Cape Elizabeth Town Councilor Anne Swift-Kayata. He said that while Cumberland was over the LD 1 cap by more than $143,000 in fiscal 2007, it has been under in subsequent years: by more than $534,000 in fiscal 2008, more than $336,000 in fiscal 2009 and nearly $435,000 in the current fiscal 2010.

TABOR II establishes fiscal 2010 as the baseline year for all future state spending growth, Shane said, pointing out that it is a time when both state general and highway funds are seeing major declines in revenue. As a result, he said, the proposal locks in state spending at current depressed levels.

"All our capital budgets are going to have to be out to referendum," Shane said. "Do you want to pave your roads? Do you want to buy (or) replace the fire trucks? Do you want to basically do a lot of the things that we budgeted for?"

"I think this council's been very responsible with their budgets in the last few years, especially," Copp said. "We've made some drastic cuts; some good people have lost their jobs in this town because of some of the cuts that we've made trying to keep this at a zero percent increase for two years in a row now. It hasn't been easy; we've really put a lot of thought into this."

King said she wasn't sure where she stood on TABOR, but she could not vote for the resolution.

"I have personal interactions with the state government; they've been enormously inefficient," she said. "I could tell you stories that would make the hair on the back of your necks stand up. But that aside ... I don't know how else to let the state know that we want them to look at their budget as carefully as we look at our budgets in our homes, and as carefully as we look at our budgets in the municipalities."

Turner agreed. "If it passes, it's going to be because a lot of people that intellectually understand that it really isn't the solution will vote for it just to send a signal," he said. "And somehow I can't bring myself to suggest to them that they shouldn't send a signal."

He added later that "I for one am ready to say that I'm not about to vote for TABOR, but I'm not going to sit here and sign a resolution to encourage people one way or the other."

The excise tax reduction question asks voters if they want to cut the municipal excise tax rate by an average of 55 percent on vehicles less than 6 years old, and to exempt hybrid and other alternative energy and greatly fuel efficient vehicles from sales tax and three years of excise tax.

Cumberland's resolution states that 68 percent of Maine vehicles are at least 6 years old and would see no excise tax change, and that the referendum's passage would cause auto excise tax revenue received by Cumberland to drop about 40 percent. Auto excise tax is the third largest revenue source supporting the town's general fund operations, providing Cumberland with about $1.3 million per year, which would drop by $530,000 through the proposal, Shane said.

That loss could be made up by a property tax increase, a cut of services or a combination of both. Town officials have pointed out that shifting the entire loss to property taxes would increase the town's mil rate by 46 cents. As a result, the owner of a $250,000 home would pay $115 more per year in taxes.

Alex Lear can be reached at 373-9060 ext. 113 or alear@theforecaster.net.