121st Maine Legislature
		Office of Fiscal and Program Review
		LD 1394
		An Act to Modernize the State's Tax System
		LR 1697(02)
		Fiscal Note for Bill as Amended by Committee Amendment " "
		Committee: Taxation
		Fiscal Note Required: Yes
Fiscal Note
					Projections	Projections
			2003-04	2004-05	2005-06	2006-07
Net Cost (Savings)
	General Fund		$0	$6,665,293	$11,571,143	$25,909,971
Appropriations/Allocations
	General Fund		$0	$65,930,438	$80,196,863	$97,805,343
Revenue
	General Fund		$0	$59,265,145	$68,625,720	$71,895,372
	Other Special Revenue Funds		$0	$3,184,955	$3,764,280	$3,943,628
State Mandate
	New or Expanded Activity				Unit Affected	Costs
	Administrative responsibilities for municipalities to revise the Homestead Property Tax Exemption				Municipality	$110,000
Fiscal Detail and Notes
	Increasing the sales tax to 5 1/2 % beginning August 1, 2004 will generate an additional $62,450,100 in fiscal year 2004-05.  The General Fund cost of expanding the Maine Residents Property Tax Program to create the Homestead Tax Cap Program is estimated to be $65,600,000 in fiscal year 2004-05.  Additional General Fund appropriations will also be required beginning in fiscal year 2005-06 to eliminate the tiered portion of the Homestead Property Tax Exemption.  This bill provides $110,000 in fiscal year 2004-05 to reimburse local municipalities for 90% of the estimated local cost of changes to the homestead exemption program.  Maine Revenue Services will also require $220,438 in fiscal year 2004-05 for the administrative costs associated with these changes.
General Fund Detail				2004-05	2005-06	2006-07
	Increase Sales Tax Rate to 5.5%			$59,265,145	$68,625,720	$71,895,372
	Expand Maine Resident Property Tax Program			$65,600,000	$74,800,000	$92,400,000
	Restore $7,000 Homestead Exemption			$0	$5,259,475	$5,264,520
	Mandate Reimbursement - Homestead Exemption			$110,000	$0	$0
	Administrative Costs			$220,438	$137,388	$140,823