• Click here for text of resolutions approved by the Town Council
• Click here for summary of findings of the Town's Palesky Tax Cap Task Force

The Town Council Monday night passed a resolution firmly opposing a statewide 1-percent tax cap referendum that will appear on ballots Nov. 2.

At the same time, Town Councilors passed a resolution promising to return 100 percent of revenues realized from the June 2004 state referendum to the tax payers should the tax-cap proposal fail.

And lastly, councilors passed a third resolution Monday setting their own spending limit for the next three years to a level not more than the rate of the consumer price index.

"This is the most important thing that we will all do and decide on in our time as councilors and in our time of living in this state," said Town Council Chairman Anne Swift-Kayatta.

The resolution setting the spending limit says "the currently elected members of the Cape Elizabeth Town Council individually commit themselves to limit spending in the next three years to a level not more than the rate of the consumer price index, with the exception of voter approved debt and an allowance for additional school enrollment and population growth."

Councilors voted 6-1 to approve this resolution, ending a lengthy discussion around the upcoming state referendum proposal to limit property taxes statewide to 1 percent of assessed valuation. The tax cap proposal, known as the Palesky referendum after Maine Taxpayer's Action Network Founder Carol Palesky, also proposes to roll back property values to 1996 levels, and to limit increases in the assessed value of properties to 2 percent per year.

"I think (the Palesky referendum) will be very bad news for our town, and bad news for our state," said Town Councilor Mary Ann Lynch, who voted in the majority to pass the resolution all three resolutions.

The first resolution opposing the tax cap reads: "Resolved, the Cape Elizabeth Town Council urges a 'No' vote on the Palesky initiative because its statewide passage will result in chaos and confusion due to the initiative's unclear and likely unconstitutional language, a loss of decision making control at the municipal level, and substantial adverse impacts on the ability of towns and cities to provide adequate municipal and school services to their residents."

The council vote was also 6-1 one to adopt the tax-cap resolution, with Councilor John McGinty dissenting. McGinty said he thought it hypocritical of the council to claim loss of local control at the hands of Palesky, when in June it favored getting more funds from the state in a referendum calling for 55 percent of education costs to come from Augusta. He also criticized the council for talking about personnel layoffs when no such decisions have been made, and that councilors are using "scare tactics" when they tell citizens that funds that have already been budgeted may not be available.

The majority of councilors, however, firmly stood by the resolution, and urged citizens to vote Palesky down. Some disagreed with McGinty's assertion that funds already budget this year would still be available. Councilor Jack Roberts said steps may need to be taken in this year's budgets to prepare for future, leaner budgets should Palesky pass.

"This isn't scare tactics," said Lynch, pointing to the work of a citizen task force which met twice a month this spring and summer to determine how the Palesky tax cap might affect Cape Elizabeth's town budget.

A "Question and Answer" sheet circulated by the task force states that if Palesky passes, property taxes will go down; town and school services will sustain major cuts; and, new and increased fees will be implemented for town services and school programs, Lynch said.

The sheet goes on to say that there is no way to tell exactly what services would be affected until cuts were made, but realistic expectations include elimination of 20 town positions and 46 school positions, reduced police and emergency coverage, and increases in the number of user fees. "The list goes on and on," said Lynch.

"I want to give these citizens a lot of credit," Lynch said of the tax force members, a cross-section of Cape Elizabeth residents representing various ages, skills and political views. "They did a darn good job of looking at the impact on our town, and it's hard for me to believe that anyone could read this (proposal) and come away thinking this would be a good thing for the town," Lynch said.

Besides urging a "no" vote on the tax-cap referendum, councilors also encouraged voters to read the four-page proposal, which is available at http://www.memun.org/resources/Public/news/pp/question.htm

"It will take a two-thirds vote to override Palesky," said Town Council Chairman Anne Swift-Kayatta. "That means 34 percent of the people will be able to dictate what we in Cape Elizabeth do. I have a lot of problems with this proposal, but fundamentally it is anti-democratic," she said. "I urge us all to get out and vote 'no', " Swift-Kayatta said.

Following their approval of the tax-cap resolution, councilors voted unanimously in favor of a resolution promising to return to taxpayers 100 percent of the net income generated from state aid to education as a result of the June 2004 statewide referendum. That referendum requires that the state of Maine fund 55 percent of local education costs statewide, and 100 percent of special education costs.

If the tax-cap initiative passes, however, that funding will "in whole or in part" be utilized for maintaining existing school programs and services to mitigate the loss of property tax revenue, according to the resolution's wording.

The last resolution approved, which commits individual councilors to limit spending in the next three years to a level not more than the rate of the consumer price index, in the eyes of some councilors gives more meaning to the pledge to return 100 percent of additional state aid to the taxpayer.

"We can't say we will return dollars from school funding, and then raise taxes even higher through more spending," said Councilor David Backer. Without the self-imposed spending pledge, Backer said, the promise to return school funds to the taxpayer means nothing.

Lynch said, "This resolution, along with the previous resolution, is my answer to, 'if not Palesky, what?' "

"It would be simplistic of me to suggest people not vote for Palesky. I feel that as a town councilor, I owe them a response to what I would do to provide tax relief," Lynch said. "It's important for us to make a commitment, and the only way I know how to do that is to limit spending."

Councilor Jack Roberts, however, objected to the town's using the consumer price index as a standard when it does not reflect the government's responsibilities to provide services such as street paving and maintenance, schools, and police protection. "Our costs are not the same as the CPI," said Roberts. Unforeseen yet necessary spending needs may come up in the next three years, Roberts said, and for that reason he voted against the resolution. "The best I can do is pledge I will work my backside off to try to keep taxes as low as possible," Roberts said.

Earlier this week, the council was to have made all three points together in one resolution, but later found the resolution too long and encompassing too many issues.

Resolutions Adopted by the Cape Elizabeth Town Council on September 13, 2004

1. Resolved, the Cape Elizabeth Town Council urges a "No" vote on the Palesky initiative because its statewide passage will result in chaos and confusion due to the initiative's unclear and likely unconstitutional language, a loss of decision making control at the municipal level, and substantial adverse impacts on the ability of towns and cities to provide adequate municipal and school services to their residents. Approved 6-1.

2. Resolved, the Cape Elizabeth Town Council pledges that if the Palesky initiative is defeated the Council will use 100% of any net additional revenue that the town receives from the state as the result of the June 2004 statewide school funding referendum, to reduce the property taxes of property owners in Cape Elizabeth. However, if the Palesky initiative is approved, any net additional revenue that the town receives from the state as the result of the June 2004 statewide school funding referendum will in whole or in part be utilized for maintaining existing school programs and services to mitigate the loss of property tax revenue. Approved 7-0.

3. Resolved, the currently elected members of the Cape Elizabeth Town Council individually commit themselves to limit spending in the next three years to a level not more than the rate of the consumer price index, with the exception of voter approved debt and an allowance for additional school enrollment and population growth. Approved 6-1.