April 07, 2020
Column

Maine should reject TABOR

Hey Angus, how do you feel about TABOR?

When I first heard about it, I wanted to support it – I know first hand how hard it is to control budgets in Augusta and thought maybe some outside discipline is what we need. The concept seems simple and when I talked to its supporters, it made some sense.

So does that mean you’re gonna vote for it?

Not anymore – I was tempted, but when I dug into what it would really mean in practice – including trying to understand how it actually worked in Colorado (where the idea started almost 15 years ago) – I had more and more doubts and am convinced now that it would hurt us a lot more than it would help.

How would it hurt?

Because we’ve really got two problems in Maine when it comes to taxes – one is high taxes, for sure, but the other is low incomes. For example, if we collected exactly the same amount in taxes as today but had Massachusetts’ average per person income, our high “tax burden” (taxes as a percentage of average income) would fall to 42nd in the country and we wouldn’t be having this discussion. And although TABOR might help on the taxes side, it would seriously hurt us on the raising incomes side.

How so?

By limiting our ability to make the kinds of investments necessary to push incomes up – education, the university and community colleges, research and development, roads, bridges and ports, worker training, economic development – all of which cost money and have to be supported over time to produce results.

Incomes have been rising in Maine in recent years relative to the rest of the country – in fact, despite all the gloom and doom around, Maine had the seventh-fastest rate of income growth in the nation from 1999 to 2004. This is real progress, but if we have to back off on these investments, we’ll start to slip backward.

But TABOR allows for increases at the rate of inflation; why should we have to back off?

Simple math. Because many of the things the state and our towns buy – highways and health care are the best examples – are going up faster than the general inflation rate – which means cuts will have to be made somewhere else each year just to stay under the spending cap. In other words, if you have a 3 percent overall cap and health care costs – which we don’t control – go up 10 percent, something somewhere else has to give.

And TABOR would flat-out gut our highway construction program. Paving costs are going up at 10 percent or more a year (in 2005, the rate was 30 percent!) and it doesn’t take a calculator to figure that if the budget can only grow at 3 percent, it won’t take long to whittle the projects down to just filling potholes.

The inevitable result of all this will be cuts in the very areas we should most want to protect to generate growth – like education at all levels, basic infrastructure and support for R&D.

C’mon, how do you know that?

Because that’s exactly what happened in Colorado. It got so bad that last year the people of Colorado – led by the business community – voted to suspend their TABOR for five years to allow funding for things like the university to get caught up. Why should we adopt something that has been given a time-out by the people of the only state where it’s ever been tried? I’ve been very influenced by the comments of several Republicans (!) from Colorado who originally supported TABOR but have switched sides after they’ve seen it in action.

“If you think this is a bad dream, it’s a nightmare,” Assistant Republican Leader in the Colorado State Senate Steve Johnson said recently on a visit to Maine. “You have no idea how bad this will be for the state … our underfunded universities, deteriorating roads, poorly funded schools and inadequate public health system were making it increasingly difficult to attract and retain good jobs.”

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But you’re talking mostly about Augusta; wouldn’t TABOR also apply to local taxes and spending, too? What’s wrong with that?

There’s nothing wrong with controlling local taxes. My problem is that TABOR is a complete violation of the idea local control. Even if the majority of your town meeting or city council wanted to raise the dog license fee by 50 cents, for example, TABOR would require two-thirds of the town meeting and a referendum to make it happen. Make no mistake, this thing turns over effective control of every town in Maine to the minority. That’s not my idea of local control.

OK, OK, but I’m thinking of voting for TABOR just to send them a message in Augusta and down at the town office that we need to lower taxes. So what if it’s got some problems? The Legislature can always fix it.

It’s always dangerous to send a message while aiming at your own foot. The Legislature is generally very reluctant to change something passed by the voters. And besides, it’s the core idea – a one-size-fits-all formula using the wrong index (income growth would make more sense) – that’s the real problem and would have the worst long-term consequences. And that would be very hard to change if we vote TABOR through.

The truth is that if we want a more prosperous future in Maine we have do two things at the same time – lower taxes and invest. TABOR might drive taxes down, but it would make the investments impossible – and without them, we’re stuck.

Lower taxes and perennially poor doesn’t sound like much of a future to me.

Angus King is a former governor of Maine.


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