Fact of the Day: Question 4 in Maine Would Limit Government Spending

On November 3rd, the voters of Maine will decide whether they want to limit the government’s ability to increase spending and taxation.  Under guidelines in the Question 4 ballot initiative, the General Fund, Highway Fund, and other Special Revenue funds would be limited to population growth plus inflation. 

Some opponents have floated the idea that this would ratchet back the budget, this claim is a falsehood.  Under TABOR, the factors of population and inflation would never be below zero, therefore the budget would not be reduced using TABOR.  The budget could stay the same from year to year if inflation and population were both zero, but it would not force reductions.    

Additionally, a Tax Relief Reserve Fund would be created.  At the end of each fiscal year, when there is surplus revenue, 80% of it will go into the Tax Relief Reserve Fund.  When the amount of the fund reaches 1% of General Fund expenditures, tax relief would would then be triggered and taxpayer dollars would be returned in the form of temporary or permanent broad-based tax rate reductions.  

To see the entirety of Question 4’s legislation, click here. 

To see ATR’s Fact of the Day press release supporting Question 4 click here.