AGO 05-2.

• Case Date: March 17, 2005
• Court: Maine

Maine Attorney General Opinions 2005. AGO 05-2. STATE OF MAINE DEPARTMENT OF THE ATTORNEY GENERAL6 STATE HOUSE STATION AUGUSTA, MAINE 04333-0006 March 17, 200505-2Senator Richard NassRepresentative Sawin MillettRepresentative Robert NuttingRepresentative Stephen BowenRepresentative Darlene CurleyJoint Standing Committee on Appropriations and Financial Affairs 122nd Maine Legislature 100 State House Station Augusta, ME 04333-0100 Dear Senator Nass and Representatives Millett, Nutting, Bowen and Curley: In your letter, dated March 3, 2005, you have asked for an opinion concerning whether or not the "annual expenditures" for the Maine Residents Property Tax Program (known as the "circuit breaker" program), for fiscal years ending June 30, 2006 and June 30, 2007, would violate the prohibition in Article V, part 3, section 4 of the Maine Constitution, on drawing money "from the treasury except in consequence of appropriations or allocations authorized by law." Because the Legislature has clearly authorized state funds to be spent for the circuit breaker program, we do not believe that this provision of the Constitution is violated by the manner in which this expenditure is reflected in the budget document. Background. We begin by summarizing our understanding of the manner in which the costs of the circuit breaker program were previously treated in the state budget process and how they are currently being handled as the result of a change in the law that took effect last year. Under the circuit breaker program, persons who meet the eligibility criteria set forth in Title 36, which are based on income level and the amount of property taxes (or qualifying rent) they have paid, may file a claim with the State Tax Assessor. Prior to the recent law change, the State Tax Assessor was authorized to pay certified claims from the General Fund directly to the taxpayers who were deemed eligible, pursuant to 16 M.R.S.A. § 6203. The projected cost of paying these claims was listed as a General Fund appropriation in the biennial budget. See P.L. 2003, ch. 20, Part A, at p. 16. In the Supplemental Appropriations bill enacted last spring, the Legislature amended the circuit breaker program statute to include a different finding mechanism. P.L. 2003, c. 673, Pt. BB, §§ 1 and 2, repealing 36 M.R.S.A. § 6203 and enacting 36 M.R.S.A. § 6203-A. The new provision directs the State Tax Assessor to determine each month the benefits for all claimants who have filed under the circuit breaker program and to certify that amount to the State Controller, who is instructed to transfer the certified amount into a "circuit breaker reserve" from "General Fund undedicated revenue within the individual income tax category." 36 M.R.S.A. § 6203-A. The State Tax Assessor then pays the certified amounts directly to the taxpayers who have been approved for the benefit in accordance with the statute. Id.(fn1) The amounts to be paid to taxpayers under the circuit breaker program are now listed as "tax expenditures," which must be listed in the budget document that is prepared pursuant to 5 M.R.S.A. § 1664(fn2) for submission to the Legislature. All tax expenditures, including tax credits, exclusions, deductions and exemptions, are treated as revenue losses and are subtracted from the total General Fund revenue. They are itemized in the budget that is enacted by the Legislature, see, e.g., P.L. 2003, ch. 673, Part UU, but they are not identified as appropriations from the General Fund in Part A of the budget. As noted in your letter, the budget bill now pending before the Legislature includes a proposed amendment to the statute governing the Business Equipment Tax Reimbursement program (known as "BETR") that is similar to the recent circuit breaker amendment. L.D. 468, Part JJ, amending 36 M.R.S.A. § 6656. The proposed amendment would authorize the transfer of the amounts...