Guidelines for the Speakerís Advisory Committee on Tax Reform

Maineís tax system is antiquated. For the last 20 years, the general public and the private sector have voiced concerns about the impact of state and local tax structures on Maine citizens and businesses. Although citizen initiatives to reduce property taxes with uncertain consequences over the last decade have failed, it is only a matter of time before one will pass, if balanced and responsible tax reform is not enacted soon.

The destabilizing effect of the current tax structure on state government revenues and the Maine economy has become well known. While the Maine economy has been undergoing substantial change from a natural resource based and manufacturing economy to a service based economy over the last 25 years, Maineís tax structure has not changed significantly since Governor Curtis reformed it 33 years ago.

Membership

The Speakerís Advisory Committee shall consist of no more than 10 members appointed by the Speaker of the Maine House of Representatives. Membership shall be composed of persons who have both demonstrated leadership in Maine and possess expertise and broad experience in public policy and tax issues. Members shall be appointed who have exemplified objectivity in their professional work.

Duties

The Speakerís Advisory Committee on Tax Reform shall examine Maineís tax structure including the property tax and the Stateís broad-based taxes. The Advisory Committee shall propose structural tax reforms that may be submitted to the Legislature or approved by the general public at referendum. Since it is crucial to ensure that tax reform brings the desired outcomes, structural reform decisions shall be based on guiding principles and goals to which the members have agreed by consensus.

The Speakerís Advisory Committee shall encourage individuals and organizations with a demonstrated constructive interest in this issue to provide their input to the Committee and any technical expertise they may possess.

The Advisory Committee shall issue a report of its findings and recommendations for structural tax reform, along with any necessary implementing legislation to the Speaker of the House.

Questions and Issues to be Addressed by the Advisory Committee

  1. What should be the goal of structural tax reform?

  2. What guiding principles should be used in developing structural tax reform? The Advisory Committee shall consider, at a minimum, the following principles and issues:
    1. Revenue stability and predictability (volatility),
    2. Equity, Fairness, and Progressivity,
    3. Strategies for lowering taxes
    4. Efficiency in revenue collection and expenditures,
    5. The proper mix or balance of broad-based taxes,
  3. Adequacy of Revenues to Meet Government Services and Obligations. How can State and local tax revenues be best assured to meet the needs and wants of Maine citizens over the long-term? How can upturns and downturns in revenues be avoided as economic conditions change?

  4. To what extent should current tax exemptions and exclusions be maintained or repealed?

  5. The extent to which intergovernmental collaboration, to include regionalization of services and administration, can reduce the tax burden on Maine citizens.

  6. Incentives for investment in the Maine economy. Are taxes the most important of the incentives or do other factors play an equal or greater role, such as health care, utility, transportation, and labor costs?

  7. To what extent should businesses and households with the same income be treated equitably with respect to taxation?

  8. To what extent should the cost of K-12 education be funded from the property tax?

  9. Any other area deemed a priority by a consensus of the Advisory Committee.

Technical Assistance

The Speakerís Advisory Committee on Tax Reform may request technical assistance from any appropriate agency or organization.

Meetings

The Speakerís Advisory Committee shall allow for testimony and written comments by any interested organizations and members of the public. At a minimum, the following organizations shall be notified about meetings of the Advisory Committee.

  1. Maine Municipal Association
  2. Maine Education Association
  3. The Economic Development Council of Maine
  4. Maine Center for Economic Policy
  5. The Department of Economic and Community Development
  6. The Muskie Institute for Public Policy
  7. The Margaret Chase Smith Center for Public Policy
  8. Maine State Chamber of Commerce and the Institute For A Strong Maine Economy
  9. Bureau of Revenue Services
  10. State Planning Office