The following is from my regular column -- it was, in a different form, also an op-ed piece.  The result was a broad based media attack on the governor's plan.  "Palesky" was a citizens initative to lower property taxes -- which I wrote several op-ed pieces in support of .  No idea what the current outcome will be, but if the past is any indicator, the people of Maine will get screwed...  

"The first one in the water loses." It was as true when the Delphi Oracle said it 2500 years ago, as it was when The Palesky Tax cap Initiative tested the water – to a resounding defeat.

In a column published September 29th, I laid out specific numeric reasons why the Tax Cap made sense – despite the fact it failed – it still makes sense to target property taxes directly. Wednesday, the governor resorted to bureaucratic alternatives – and opened the door to making taxes worse.

In September, I demonstrated a critical flaw a Maine State Chamber of Commerce alternative. In his proposal, the governor adopted the Chamber alternative – a 6% of income cap on taxes; and handled my objection by making the excess a deferred tax – to be paid when the owner dies, or the home is sold. Apparently, the cap only applies to those on fixed incomes – my example in the column.

Deferred taxes, repaid with interest, equates to a State funding of mortgage to pay property taxes. The trade calls this a "reverse mortgage." It in no way reduces the overall tax burden, rather it is a tactic to pass current taxes to the next generation – accruing interest is a phantom revenue used to "balance" the current budget. Think of it as a credit card, interest, but no payments; and every year they increase the credit line then max it out, with the final bill going to your heirs.

The actual cash expense for the local tax comes from the state, but is off budget, a "reserve loan".

In reality, given current life expectancies, even a nominal interest rate, with only accruals, even an expensive coastal property would ultimately be worth less than the debt. But that doesn’t matter, the proposal also expands Maine Residents Property Tax Refund Programs – to cover residents earning $50,000 (single) to $75,000 (couple) in 2005 and refund up to $3,000. This renders some of the deferral meaningless. This "circuit breaker relief" transfers local taxes to the state treasury.

Maine median valuations are under $100,000 property value and 17.5 mil rate. Current refunds cover 50% of the tax burden. The increase foretells an anticipated tripling of mil rates.

For Palesky, the State Supreme Court determined the Constitution did not allow for two classes of residential property taxpayer – the governor proposes to change the Constitution. Values will change from "actual" to "use" – initially this will allow higher taxes for second homes, but it is a local "manipulation of valuations" cash cow which will allow tripling of mil rates.

Recently I mentioned unfunded State and Federal educational mandates – the Governor proposed a $250 million extra for school funding, and 100% coverage of Special Education costs, bringing the state’s share to 50%. As I showed, the state is adding more money through backdoor offsets. Across the board reductions in both expenses and property taxation are possible in an honest and straight forward manner. You don’t need manipulative gimmicks.

Educationally, and thus economically, this nation is falling behind those nations which have some form of centralized educational system. The State should abandon the gimmicks and change the Constitution to make direct incremental educational costs a state responsibility. By assuming the responsibility for personnel and materials overhead, local property taxes would immediately be cut by about half – School Districts could then provide the physical facilities as a local responsibility.

Palesky threw down a gauntlet – it was taken up and a battle ensues. Victory will be measured by the burdens lifted, not concealed – the armies are a river apart. Who’s feet are wet this time?

On December 8th the first Hanukkah light is lit; may the eight successive days of light reveal that the impossible is often only improbable – the improbable is both possible and achievable.