This woman killed tax reform

In the lobby
By LANCE TAPLEY  |  July 11, 2007
1inside_tji_edmonds_071307
KILLER QUEEN: State senator Beth Edmonds,
D-Freeport.

Much speculation has gushed from newspaper columns on the intricate causes of the defeat of a long-awaited, far-reaching, and progressive tax-reform bill in the past legislative session.

But in the end it was killed by a single vote.

Breaking with legislators of her own party, and siding with Democratic governor John Baldacci, who had lined up with the Republicans and the business lobby, Democratic Senate president Beth Edmonds switched her vote in the session’s last hours, dooming LD 1925.

“She pulled the plug,” says Taxation Committee chairman Joseph Perry, the Bangor Democratic senator who was a chief author of a measure that, its supporters say, was the best shot in many years at reforming a creaky and unfair tax structure.

Edmonds’s action has left a sour taste in some mouths: “Is it our leadership’s job to lead the [Democratic] caucus or to do the governor’s bidding?” asks a tax-reform supporter, John Nutting, the Democratic senator from Leeds. He says he witnessed legislators getting calls from the governor “saying he didn’t want anything reaching his desk.”

“People had too many questions” about the bill, Edmonds says, in a subdued voice on the telephone, explaining her change of heart, and echoing a Baldacci explanation of his antagonism. Edmonds says she didn’t talk with the governor about her decision, but “I would think his opposition played a part in her decision,” says Baldacci press aide David Farmer.

After months of deliberation, the bill had come out of the Taxation Committee in early June with a bipartisan, 11-to-2 “ought to pass” recommendation. But the bipartisanship fell apart once the business lobby sprang into action. The Maine State Chamber of Commerce, the Portland Regional Chamber, and representatives of many special-interest groups combed the State House looking for legislators.

Still, Democrats overwhelmingly supported the bill. It passed the House, where Democrats have a comfortable majority, by 80 to 59. In the Senate, where Democrats have a thin 18-17 advantage, the head count before Edmonds’s defection showed 16 Democrats and two Republicans in favor, for a one-vote margin, according to four senators who were contacted by the Phoenix. The two Republicans in favor were moderates Karl Turner of Cumberland and Peter Mills of Cornville. Conservative-minded Democrats Bill Diamond of Windham and Barry Hobbins of Saco were opposed.

Once Edmonds switched sides and passage was hopeless, many Democratic senators — nervous how the bill was being portrayed publicly by Republicans as a tax “shifting,” which suggested a tax increase — voted against it. This was “a political decision,” Perry admits. Even he voted against it in the final tallies. The Senate formally buried the bill, 28 to 7, on June 21, the session’s last day.

LD 1925 would have spread out the sales tax onto many services, financing a drop in the income tax from a top rate of 8.5 percent to, eventually, a “flat” 6.25 percent for all taxpayers. This drop would have made Maine welcoming to business investment, supporters say. The bill’s new tax credits and an expanded “circuit-breaker” property-tax break would have kept the tax system’s existing “progressivity” — the poor pay less, the rich more. Largely through “exporting” taxes to out-of-state visitors, 90 percent of Mainers would have had their taxes lowered by a total of $140 million.

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