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Local voters reject beverage tax, say no to casino in Maine landslide

By Jim Kanak
jkanak@seacoastonline.com

Voters in Maine overwhelmingly approved the People's Veto on Tuesday, and rejected a new tax on beverages to support the Dirigo Health Plan.

Question 1 on the ballot won by a vote of 389,479 to 220,193, according to the Bangor Daily News, with 87 percent of all precincts reporting.

"We never took this for granted," said Ted O'Meara of Fed Up with Taxes, the group that led the citizens' initiative to repeal the tax. "Ballot questions can be challenging and volatile. We were hoping for a very convincing showing and we got one."

O'Meara said the signs of the landslide win were evident early on.

"It started to form with only five to 10 percent of the votes in," he said. "Once we got to the 60 to 40 percent range it held there. That leads me to believe that we ran very strong across the state."

In fact, the final percentage difference was 64 to 36 percent of the votes in favor of the question.

An attempt to reach Gordon Smith of the group No on One, which sought to defeat the question, thereby maintaining the tax, was unsuccessful.

Voters faced two other questions on the state ballot.

Once again, a proposed casino, this one in Oxford County, was defeated by a 343,790 to 282,307 count.

Finally, a bond issue to support public water system infrastructure projects led by 301,070 to 292,946, only a one percent difference, again with 87 percent of precincts reporting, according to the Bangor Daily News.

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UMaine Economist Calculates Tax and Job Impacts of New Beverage Taxes


October 6, 2008
Contact: Todd Gabe, 581-3307; George Manlove, 581-3756 

ORONO – Maine’s new beverage taxes, at the heart of Question 1 on this November’s ballot, will cost Maine businesses and households as much as $40.7 million annually in higher taxes on beer, wine and nonalcoholic beverages, according to new research by University of Maine economist Todd Gabe.

These taxes, imposed by Public Law 629, also would result in the reduction of $17.5 million in beer, wine and soft drink net sales revenue. Including multiplier effects, the total economic impacts are an estimated reduction in sales revenue of $26.3 million statewide, with a loss of 395 full- and part-time jobs that provide about $8.8 million in income, according to Gabe.

"These total impacts are spread across the entire Maine economy, but concentrated in restaurants and bars, retail stores and other companies that sell and distribute beverages," he says.

"Many people might be tempted to combine the $40.7 million in additional taxes and the $26.3 million in reduced sales revenue into a single impact figure. But that would be comparing apples and oranges," Gabe said. "They are different types of impacts, but the bottom line is an increase in the price of beverages and a loss of sales revenue to the beverage industry."

Gabe’s study on the fiscal and economic impacts of the beverage tax was commissioned by "Fed Up With Taxes," a coalition of businesses and individuals, and several associations representing stakeholders.

The report does not take a position on Question 1, Gabe says. "It simply estimates the effects of the new law on beverage taxes, as well as the economic impacts of the statewide reduction in beverage sales revenues associated with the tax hike," he says. "Other aspects of the law need to be considered to make a judgment about whether Public Law 629 is ‘good’ or ‘bad’ for Maine."

The intent of the study is to inform the debate on Question 1 – the repeal question – on the upcoming ballot, Gabe says.

"This kind of information is important for voters to consider," he says. "It’s a lengthy report, but the majority of it is about how the numbers were generated."

Gabe can be reached for comment at (207) 581-3307.

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