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Palesky Referendum and the Loss of Local Control and Decision-Making

Much has been said about the loss of municipal revenue, which will result from passage of the Palesky tax cap proposal. Much less has been said about the loss of majority rule, local control, and home rule contained in the proposal. There are at least five ways in which this proposal will fundamentally alter our system of simple majority rule and traditional New England town government.

First, while the proposal only requires passage by a simple majority of the voters in November (50.0% + 1 vote), Section 356 of the proposed law requires that any subsequent change in state property tax law must be passed by two-thirds of the voters in a statewide referendum. The tax cap can be passed by 51% of the voters in November. Imagine that after a few years voters seek to either amend or repeal the law. Sixty five percent of the voters could vote to change the tax cap law, but because the majority falls short of two-thirds, the change will be unsuccessful. The public needs to understand the fundamental shift from majority rule to rule by a 34% voter minority.

Second, this same two-thirds rule applies to any bonded indebtedness incurred at the local level. Money for capital improvements such as fire and public safety, schools, solid waste facilities, and land acquisition all must be approved locally by a two-thirds vote. Again, the upshot is that a minority of 34% can block the desires of the majority of a community. In our own town, the 1985 sewer expansion project, which received 61% of the vote, and the 1993 middle school renovation, which received 52% of the vote would not have been approved under the two-thirds rule of the Palesky tax cap.

Third, the proposal permits "special taxes," presumably for governmental activities that may be eliminated as a result of the tax cap. For example several local governments may join together to fund a library district. Again, the two-thirds voter approval rule applies to the imposition of any "special" taxes.

Fourth, the Palesky proposal lacks any local over ride, unlike the Massachusetts tax cap. There are no mechanisms which would permit a town to raise and spend more money on education and services, even if 90% of a town's citizens wanted a certain level of services, not to mention a simple majority.

Lastly, the California experience may be instructive. Should the state become more financially responsible for providing K-12 education and other basic services, Maine's long tradition of home rule and local control may be seriously eroded. Any additional state aid likely will come with strings attached.

The Task Force encourages the public to study the issue of local control and to read the actual language of the proposal in order to fully understand these less well-known provisions and consequences of the Palesky tax cap.