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Two states seek to rein in spending

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It's not exactly the year of the tax revolt, but 2009 could wind up as the year of the spending backlash.

Two states — Maine and Washington — have measures on the November ballot that would tighten the screws on state budget increases. Given voter anxiety over the hundreds of billions spent on the federal stimulus package, combined with ballooning state budget deficits, proponents say the timing couldn't be better.

"People see what's going on in Washington and Augusta, and they're terrified," said David Crocker, chairman of the Maine Taxpayers Bill of Rights Now, which is sponsoring the anti-spending Question 4. "This time, it's more about the spending than the taxes. That's what really gets people torqued up."

Question 4 would limit increases in state spending according to population growth and inflation. Any spending exceeding those caps would have to be approved by the voters. The initiative would also require towns and counties to seek voter approval for tax and spending hikes under certain circumstances.

The measure is modeled after Colorado's Taxpayers Bill of Rights, better known as TABOR. So far Colorado is the only state to have passed such an initiative, although Maine tried unsuccessfully to pass its own TABOR in 2006.

That measure failed by a margin of 54 to 46 percentage points. After its defeat, state legislators promised to hold a tighter line on the budget, but then raised taxes on beer and wine and added a soda tax in 2008. The moves triggered a popular uprising and were defeated by a so-called Maine people's referendum in November.

The good news for TABOR advocates is that Mainers remain upset over the brew tax debacle and may be itching to send another message to the Legislature. First, however, they'll have to overcome the opposition of Maine's political establishment — Democratic Gov. John Baldacci and leading Democratic legislators oppose Question 4 — along with heavy labor union resistance.

Mike Tipping, spokesman for the Maine People's Alliance, which is leading the charge against Question 4, said the anti-TABOR campaign would focus on what clamping down on spending could mean for Maine residents, starting with a loss of services and a direct hit to the economy.

"If tax caps are put on in a time of inflation, it would lock us into a recession," said Mr. Tipping. "TABOR would prevent the state from making investments in the future, which is how we would get out of a recession."

He pointed to Colorado, saying that the state's TABOR has led to declines in state education spending and a subsequent drop in literacy and test scores.

"It would be unfortunate to have what happened in Colorado happen to Maine," Mr. Tipping said.

Former Colorado Gov. Bill Owens took exception to the comparison, saying that Colorado's economy has been far healthier than that of most states, thanks in part to TABOR, without suffering declines in educational standards.

"I would take Colorado's economy over Maine's economy any day," said Mr. Owens, a Republican. "Compare their unemployment rates and growth rates, and tell me how TABOR has hurt Colorado and how not having TABOR has helped Maine."

According to the latest Bureau of Labor Statistics, Colorado has a jobless rate of 7.8 percent, compared to Maine's 8.4 percent. Both are below the national average of 9.7 percent.

Washington state's Initiative 1033 would also tie state and local spending to population growth and inflation, with voters required to approve any increases in revenue beyond that. One unique feature is that any revenue collected beyond the state cap would go to reduce property taxes.

Tim Eyman, who co-sponsored Initiative 1033, said he has never seen a better political climate for a smaller-government measure. He should know: He and his partners, Jack and Mike Fagan, have put 12 measures on the Washington ballot since 1998. Eight have passed.

"I've never seen an initiative that fits the times as much as this one," Mr. Eyman said. "People are astronomically concerned that, my God, government keeps getting bigger and bigger and nobody seems to be in control of this thing."

Even so, the initiative will have to overcome stiff opposition from the same alignment of forces at play in Maine — Washington Gov. Christine Gregoire, a Democrat, and the Democratic-controlled Legislature, as well as the major labor unions. They argue that the initiative will sink the state's already vulnerable economy.

"Starved for revenue, our government will have no choice but to continue to lay off public servants, destroying any chance of an economic recovery and creating a ripple effect that will lead to additional job losses in the private sector," according to Permanent Defense, a Washington-based advocacy group leading the opposition to the measure.

The key issue in the Washington campaign could be Mr. Eyman himself. Opponents regularly paint him as a right-wing zealot and gadfly who enjoys toying with government through the initiative process. Campaign literature against Initiative 1033 asks voters to "reject Tim Eyman's jobs-killing initiative."

Mr. Eyman says that tactic hasn't worked in the past and isn't likely to work this time.

"In all 11 campaigns, they've said I'm this bad guy, I'm irresponsible, reckless. You'd think at a certain point they'd admit this is not persuasive to voters," he said.

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