AUGUSTA – Saying they’re unhappy with Maine’s high taxes but that a property tax cap would create chaos, leaders of the Maine State Chamber of Commerce on Wednesday came out in opposition to the tax-cap referendum, saying they plan to offer an alternative today.

Chamber President Dana Connors said the alternative will be presented to the Legislature and, if approved, would mean Maine would no longer be known as a high-tax state.

Wednesday was the first time the chamber, which represents nearly 1,200 Maine businesses, has offered a position on the tax cap. After studying the proposal for several months, the chamber’s board voted unanimously against it Sept. 8, Connors said.

After state lawmakers adjourned with no relief plan, there was significant support for the tax cap, but those favoring it did so for the wrong reasons, Connors said.

“They never said it was a good bill. They said it’s the only alternative’ and we’ve got to do something, we’ve got send a message,'” Connors said. The chamber decided to step back and analyze the tax cap. “It’s emotionally appealing, but does it work?” Connors said.

Chamber leaders concluded no. If passed it would reduce property taxes but then shift taxes to the state, Connors said. “It’s tempting, but it would be made up with other taxes. It is extreme, and it would create more chaos and confusion.”

While everyone is frustrated with state lawmakers for not acting to reform taxes, the tax cap does not answer the problem, Connors said. Chamber leaders looked at California, which has a similar tax cap. “It’s still a high-tax state,” he said.

Business representatives on the chamber’s board, including those from L.L. Bean, Bath Iron Works and UnumProvident, agreed. The tax cap “is not worth the risk to our businesses to blow up local government,” said David Brenerman, assistant vice president at UnumProvident. Businesses do not want their property taxes lowered at the risk of hurting Maine’s schools and “at the peril of services that people will regret getting rid of,” he said.

As to the chamber’s alternative, Gov. John Baldacci has said he will not call a special legislative session before the election to deal with the tax-relief issue. Effectively the best the group can hope for is persuading voters that its plan has merit and put it before the Legislature in the next session.

House Minority Leader Joe Bruno, R-Raymond, said he was told the plan will combine tax and spending caps. Bruno said Connors told him in August the chamber planned to propose limiting property taxes to 6 percent of income, as well as passage of a state law that would cap government spending at the state, county and municipal levels.

Observers disagree on whether the chamber’s plan will have an impact on the referendum.

While some described it as a minor distraction with little bearing on the outcome of the referendum vote, others, such as tax-cap supporter Phil Harriman and opponent Dennis Bailey, said it may persuade voters to reject the referendum.

But Harriman also said some jaded voters may remain skeptical because the Legislature has a poor track record on the issue.

“If you look at history, there have been a lot of proposals, a lot of debates and a lot of votes, and all of the proposals have been rejected,” Harriman said.

Bailey noted that if state officials view the chamber’s plan as “realistic,” and if that persuades voters that the state will rein in high property taxes next year, it could “take some of the gas out of” the referendum.

If the Legislature fails to enact meaningful property tax relief, one official said Wednesday that the chamber would consider collecting signatures to get its proposal on the ballot in 2005.