AUGUSTA -- A group seeking to repeal a new law that makes major changes to the state tax code has enough signatures to put a question on the June ballot, Secretary of State Matt Dunlap ruled Monday.

Still Fed Up With Taxes turned in 56,107 valid signatures -- 1,020 more than needed to call for a people's veto vote. The group was led by the Maine Republican Party and state Sen. David Trahan, R-Waldoboro.

"It's a huge relief to get an answer," Trahan said. "All of us were sleeping on pins and needles."

Dunlap announced his decision one week after the group sued him for missing the deadline to determine whether the signatures are valid. That court challenge may continue because it addresses inconsistencies in state law, said Dan Billings, who filed the suit.

The question on the June 8 ballot will read:

"Do you want to reject the new law that lowers Maine's income tax and replaces that revenue by making changes to the sales tax?"

If the veto is successful, it would be the second law passed by this Legislature to be repealed by voters. Last week, voters rejected a new state law that allowed gay and lesbian couples to marry.

This repeal effort stems from a law passed by the Legislature and signed by Gov. John Baldacci in June. Majority Democrats passed L.D. 1495, "An Act to Implement Tax Relief and Tax Reform."

The law, which was touted as the most significant change to the state tax code in 40 years, reduces the income tax from 8.5 to 6.5 percent for income below $250,000 and to 6.85 percent for income over $250,000.

To pay for the reduction, the new law increases the meals and lodging tax from 7 to 8.5 percent and applies the state's 5 percent sales tax to dozens of additional items such as car repairs, movie tickets and dry cleaning.

Supporters say the new system will provide stability to state revenues by broadening the sales tax base beyond new car sales and construction materials.

Maine Revenue Services estimates that 87 percent of all Maine taxpayers will see their overall tax burden go down, even when the additional sales tax is added in.

House Majority Whip Seth Berry, D-Bowdoinham, said he is considering a challenge to Dunlap's decision because it was so close to the required number of signatures. The decision could be challenged in Superior Court.

Berry said a spring vote will delay implementation of the law by at least a year.

"We've waited for decades for true tax reform," he said. "This is not a new idea. We're not there yet, but I'm confident we will get there."

Opponents such as Trahan say it's important to have a thorough public debate over what's in the law. In particular, he says the tourism industry and car repair shops will be hurt by the changes to the tax structure.

"To me it seemed like a Hollywood production," he said. "I was looking at the bill and saying this doesn't look like a good bill to me."

Trahan and other Republicans got a boost from the Maine Green Independent Party, which also helped collect the signatures necessary to call for a people's veto. They turned in their signatures on Sept. 11, which trigged a 30-day window for Dunlap to validate the petitions.

Dunlap said budget cuts and the Nov. 3 election meant he did not have the staff to meet the 30-day deadline.

In an analysis released with the decision, Dunlap said his staff found several thousand signatures were not valid for a variety of reasons, including that they had not been certified by a registrar as belonging to a registered voter, were duplicates, or that the voter's signature was crossed out.

Senate Minority Leader Kevin Raye, R-Perry, said in a statement that although he doesn't like the way the ballot question is worded, he's happy the public will have a chance to vote on it.

"I'm very pleased that the petition drive succeeded, and the people of Maine will have an opportunity to decide the fate of the sweeping new taxes imposed on a range of services, and increased taxes on meals and lodging as part of the partisan tax reform package passed by Democrats in the Legislature," he said.

Susan Cover -- 620-7015

scover@centralmaine.com