AGO 06-4.
Case Date | April 05, 2006 |
Court | Maine |
Maine Attorney General Opinions
2006.
AGO 06-4.
STATE OF MAINE
OFFICE OF THE ATTORNEY GENERAL6 STATE HOUSE STATION
AUGUSTA, MAINE 04333-0006 April 5, 200606-4Hon. John RichardsonSpeaker of the House
Maine House of Representatives 2 State House Station
Augusta, Maine 04333-0002 RE: Constitutionality of Initiated Bill 1, L.D. 2075,
An Act to Create the Taxpayer Bill of RightsDear Speaker Richardson::
In your letter of March 29, 2006, you have asked for an opinion
concerning the constitutionality of Initiated Bill 1, L.D. 2075, An Act
to Create the Taxpayer Bill of Rights (known as the "TABOR
initiative"), including in particular the constitutionality of proposed Title 5
M.R.S.A. § 2043, which requires a 2/3 vote of each House of the
Legislature as well as approval of a majority of voters at a statewide election
before any measure to increase state revenue may become law. You questioned
whether the TABOR initiative is constitutional under Article IX, section 9, or
any other provision of the Maine. Constitution. In accordance with your
request, and given the time constraints posed by the Legislature's imminent
adjournment, we have focused on the provisions in the bill relating to state
revenue, which present the most significant constitutional issues. Because the
same procedures set forth in proposed section 2043 apply to legislative
enactments that would either raise revenue or spend available revenue in excess
of expenditure limits in the initiated bill, we believe that other
constitutional defects we have identified in section 2043 affect both, and thus
have addressed the expenditure provisions ofthe initiative to that extent. We
have not analyzed and thus do not address the revenue and expenditures limits
applicable to units of local government.
Based on the analysis described below, we believe that a court
would likely conclude that the procedural limitations in the TABOR initiative
requiring a 2/3 vote of each House of the Legislature as well as statewide
voter approval for enactment of any measure to increase state revenue violate
several provisions of the Maine Constitution. First, the supermajority and
voter approval requirements result in a surrender of the Legislature's power of
taxation, in violation of Article IX, section 9. Second, the provisions that
subject emergency enactments to voter approval and narrow the definition of
emergency unconstitutionally limit the Legislature's authority under Article
IV, part 3, section 16. Third, by subjecting every legislative act that either
increases revenue or exceeds expenditure caps to voter approval at a statewide
referendum, the TABOR initiative attempts to bind future legislatures and would
effectively create a referendum process that is inconsistent with the
requirements of Article IV, part 3, sections 16-22 of the Maine Constitution.
Finally, the supermajority requirements that apply to legislative acts
exceeding either the revenue or expenditure caps are inconsistent with the
Legislature's constitutional power to enact non-emergency measures by simple
majority and are therefore unenforceable under Maine's Constitution.
Background
We begin by summarizing the provisions in L.D. 2075 that are
primarily 'at issue. L.D. 2075 proposes to enact a new chapter 167 in Title 5,
entitled "The Taxpayers' Bill of Rights." It defines an "increase in revenue"
to include any tax levy that causes a net gain in state revenue,1 including a
new tax or fee; an increase in the rate or the base of any existing tax or fee;
repeal or reduction of any tax exemption, credit or refund; extension of any
tax or fee increase that is expiring; and any reduction in benefits or
eligibility under certain tax reimbursement programs without corresponding
increases to offset those reductions. 5 M.R.S.A. § 2041(2)(A)-(D).2
Proposed section 2043 sets forth the procedural requirements that must be met
before any such increase in revenue may become law. First, the measure "must be
approved by a vote of 2/3 of all the members of each House of the Legislature;"
and, second, it "must be approved by a majority of the voters" at the next
general election, or at any regular or special election before the general
election if the Legislature determines the increase should take effect sooner.
§ 2043 (l)(A)&(B) and § 2043(3). Voter approval of a revenue
increase is not required if annual state revenue "is less than annual payments
on general obligation bonds, required payments related to pensions and final
court judgments." § 2043(2)(A). The TABOR initiative also specifies a
formula for limiting state expenditures and provides that any revenue exceeding
those expenditure limits may be spent only if approved according to the
procedure for revenue increases set forth in proposed section 2043 (i.e., the
2/3 legislative vote and voter approval requirements). § 2044(1), (3)
& (4).
The procedure for enacting emergency tax measures is slightly
different. An emergency tax "must be approved for a specified time period by a
2/3 majority of the members of each House of the Legislature" and must then be
submitted for approval by the voters at the next statewide election. §
2049(1). If the voters do not approve it, the emergency tax "expires 30 days
following the election." § 2049(2). Under this bill, "emergency" does
not include "economic conditions" or "revenue
shortfalls." § 2043(2).
Finally, the TABOR initiative provides that any change in the
rate of excise tax on motor fuels and distillates resulting from the adjustment
made pursuant to the statutory formula in 36 M.R.S.A. § 3321(1) "may only
take effect if approved by a majority of the voters at a regular or special
election." L.D. 2075, § 9, proposing 36 M.R.S.A. § 3221(5).
Analysis and Discussion
I.
Surrender or Suspension of the Legislature's Power of Taxation (Me. Const., art. IX, § 9)
Article IX, section 9 of the Maine Constitution contains a simple, emphatic statement:
The Legislature shall never, in any manner, suspend or surrender the power of taxation.Several other states have similar constitutional provisions, but the strong wording of the prohibition in Maine's Constitution makes it "unusual." Boston Milk Producers, Inc. v. Halperin, 446 A.2d 33, 40 (Me. 1982). Section 9 was adopted by the people of Maine, effective on January 5, 1876, and its original purpose "was to curb a legislative practice of including in charters of railroads and canal companies clauses purporting to create certain permanent immunities from taxation." Id. However, the Law Court held in Boston Milk Producers that its application is not limited to that original purpose:
[T]he language of the prohibition is broad enough to include a surrender or suspension of the taxing power having some effect other than creation of a permanent tax immunity. The words "never" and "in any manner" create a strong and sweeping prohibition.446 A.2d at 40 (emphasis added). Under the Constitution of the State of Maine, ensuring that the flow of revenue into the State Treasury is sufficient for the essential needs of the State and its citizenry "is solely a legislative function." Morris v. Goss, 147 Me. 89, 103-104, 83 A.2d 556, 564 (1951). Indeed, the Law. Court has emphasized that " [t] axation is a sovereign right," and that "[t]his right is so vital and so essential to the existence of government that the suspension or surrender of the power of taxation...
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