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Chamber Withdraws Support for Spending Cap Initiative
September 22, 2009   Reported By: A.J. Higgins

Proponents of a referendum that would place spending caps at state and local levels sustained a minor setback today after the state's largest business organization withdrew its support for the Taxpayer Bill of Rights, more commonly known as TABOR 2. Dana Connors, President of the Maine State Chamber of Commerce, says the Chamber was simply unable to reach a consensus position on Question 4. While TABOR supporters downplayed the development, the proposal's opponents hailed the decision as a victory for Maine business and tourism.

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Maine Chamber of Commerce withdraws TABOR Support
Originally Aired: 9/22/2009 5:30 PM
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Different businesses struggle in different ways under today's difficult economic conditions, and those distinctions are evident in the decision by the Maine Chamber of Commerce to abandon its support for TABOR 2 -- only five months after giving the measure a vote of support before a legislative policy committee.

For some, TABOR 2 simply goes too far.  "They've included all kinds of revenue, and just about every source of revenue, and that's where you hear a lot of the opposition," says Dana Connors, President of the Maine State Chamber of Commerce.  Connors was among those expressing support for TABOR 2 in April at the State House -- largely because many business owners believe that state does not do enough to provide tax relief for employers who actually produce the jobs in Maine.  

But another large group of chamber members, including some whose business interests are linked to state contracts, took exception to the across-the-board restrictions that TABOR 2 places on spending decisions at the state and local level. The chamber's members split on the question and were unable to reach a decision, which Connors emphasizes is not to be confused with a stated position of neutrality.

"When you have a complex, challenging policy like this is, it is very difficult in a referendum process that only allows you a 'yes' or a 'no' to reconcile those challenges.  Because this issue, as we found out after three hours of really open, honest dialogue, debate, discussion, trying to come to a place, is nearly impossible to answer 'yes' or 'no'.''

The decision placed Connors in the somewhat awkward position of having to retract the Chamber's stated support for Question 4 in April when the citizen's-initiated bill came before the Legislature's Taxation Committee. The chamber also opposed a similar TABOR bill in 2006.

"TABOR 1 came along, we did not like the impact it had, particularly on the service part of our economy.  We stood up against it.  We then worked with MMA, MEA and anybody else that would work with us, and it was a great group, but we couldn't get to the Legislature.  This year when TABOR 2 came up, we said, 'You know, we've tried everything conceivable to finish the work that was started, and the teeth in the spending limits really does reflect that unfinished work."

"This clearly is a backing off of the position the Chamber took in April when they testified in support of TABOR before the Legislature," says Crystal Canney, a former communications director to Gov. John Baldacci who now serves as a spokeswoman for the No On 4 campaign that is fighting to defeat TABOR 2.  

She says the fact that the Chamber has moved away from its original position demonstrates what she says will be the negative impacts of the policy's spending caps.  "It is an acknowledgement of the damages and the devastating effects that TABOR 2 would have on our infrastructure, both transportation and on tourism."

But at Yes on 4 headquarters in Portland, campaign chairman David Crocker minimized the Chamber's decision, pointing out that it opposed TABOR 1 and that at least the organization chose not to oppose TABOR 2. "I'll take whatever advance I can get in their thinking, and to me this represents an advance."

TABOR 2 was also criticized by a tax policy expert brought in by the No on 4 campaign. Iris Lav, of the Washington DC-based Center on Budget Policy and Priorites, outlined what she sees as some negative consequences of TABOR 2.

"They said, 'This is enough and we have to suspend TABOR and repeal part of it,'" Lav says, referring to similar legislation passed in Colorado.  "Then the median employment growth in that period in the other seven states was over 9 percent.  In Colorado, it was fundamentally zero -- 0.2 percent.  And so they couldn't recover.  That could happen here as well, that is likely to happen here as well."

Dana Connors says the Maine State Chamber of Commerce continues to remain dedicated to any legislation that will put real teeth into state spending limits.

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