Legislation

BILL SUMMARY

This initiated bill imposes expenditure limitations on state and local government and requires voter approval of certain state tax increases.

Under this bill, growth in annual expenditures of the General Fund, the Highway Fund and Other Special Revenue Funds are limited according to increases in population and inflation. For the General Fund and Highway Fund budgets, revenues exceeding the expenditure limitation must be distributed by directing 20% of that excess to a budget stabilization fund and 80% of that excess to a tax relief fund. The budget stabilization funds may be used only in years when revenues are not sufficient to fund the level of expenditure permitted by the growth limits. The Tax Relief Reserve Fund must be used to provide tax relief through broad-based tax rate reductions or refunds proportional to individual income tax personal exemptions claimed in the previous tax year. The Highway Fund Reserve Fund must be used to provide a decrease in motor fuel taxes. For state agencies that manage Other Special Revenue Funds, the managers of those funds must report excess surpluses to the Legislature with a plan for refund of those revenues.

Under this bill, a state tax increase would require a majority vote of each House of the Legislature and majority approval of the voters.

This bill provides that state expenditure limits contained in the bill may be exceeded by a majority vote of each House of the Legislature and majority approval by the voters.
The bill adds the requirement of majority approval by the voters before municipal and county expenditure limits may be exceeded.

The bill requires majority approval by the voters for the annual indexing for inflation of motor fuel taxes.

The bill requires counties and municipalities to use a cost center budget summary format developed by the Department of Audit and requires information in that format to be made available to local voters, filed annually with Maine Revenue Services and posted on any publicly accessible website maintained by the county or municipality as well as on the Maine Revenue Services website.