Local legislators, school superintendent react to LePage budget

Budget seen as hurting towns, shifting cost locally
By Juliette Laaka | Jan 17, 2013
Elected to serve the citizens of Knox County are, from left, Jethro Pease, R-Morrill; Deborah Sanderson, R-Chelsea; Walter Kumiega, D-Deer Isle; Elizabeth Dickerson, D-Rockland; Jeffrey Evangelos, unenrolled from Friendship; Joan Welsh, D-Rockport and Chuck Kruger, D-Thomaston.

If Gov. LePage's proposed biennial budget is approved by the Legislature as is, it will leave Regional School Unit 13 in a $1.6 million hole the first year, and cut municipal revenue sharing — shifting the financial obligation to local taxpayers.

The budget — for fiscal years 2014-2015 — totals $6.3 billion. The state is facing a $135 million budget shortfall for the fiscal year 2013, which runs July 1 to June 30.

To mitigate the shortfall, a curtailment order was issued in late December that trims $35.5 million from the state budget following a downturn in projected revenue. The order will run through the 2013 fiscal year.

Cuts to education, towns, and services in the biennial budget are further exacerbated by the recent curtailment order.

In a statement from Geoff Herman of the Maine Municipal Association, the effect of the budget and supplemental budget for  the current year, "either completely break or seriously violate nearly every significant financial agreement that has been struck over the last 80-plus years between the state and local government."

These agreements include the motor vehicle excise tax system, general assistance, the 55 percent education funding directive, and the property owners' Homestead Exemption.

The budget will strip $420 million over two years from municipalities.

A main provision in the budget affecting all property owners in Maine is the slashed municipal revenue sharing — $283 million over two years. This sharing pool is funded by a percentage of the state government's sales and income tax receipts and issued monthly to towns for property tax relief.

In a budget message, LePage said such funding would be "temporarily" suspended until the economy improves.

To cover the suspended state share, burden will shift onto property taxpayers, said local legislators.

RSU 13 Superintendent Lew Collins said if LePage's budget passes without adjustments, the district will be facing a $1.6 million hole next year — and that's just to break even.

This includes requiring districts to pay for half of employee retirement, of that, $900,000 is the share RSU 13 would pay each year. The budget also proposes funding schools at the current 45 percent contribution over the next two years.

The district will also continue to absorb $151,000 stemming from the December curtailment order, nixing a total of $12.6 million from school funding statewide.

Independent Legislator Jeffrey Evangelos of Friendship said the curtailment order will cost RSU 40 $132,000.

The need for local financial support for schools coupled with the loss of municipal revenue sharing, is a double hit to taxpayers, he said.

Evangelos said he will fight the governor's proposal and will "do everything in my power to protect our towns."

He said the state needs to reverse the tax cuts for the wealthy that were recently enacted by the last Legislature to help raise revenue to offset the impact of this budget on towns.

"It's almost unfathomable," Collins said, adding he hopes the Legislature will re-work proposals to allow relief to property taxpayers.

Rep. Chuck Kruger, D-Thomaston said a Republican legislator told him LePage knows the bill will not pass.

"People are getting hurt," Kruger said, citing cuts to education, services and towns.

"It’s not entirely clear whether the governor is ignorant about the effects of this budget, or arrogant in that he just doesn’t care," he said in an email.

Kruger also pointed out the governor has created two additional departments in the executive branch with "no clear mission" while slashing spending in other areas. He added he is opposed to "killing" clean elections laws that were voted in by referendum and failing to maintain existing infrastructure and roads, believing inaction will incur higher future costs.

Rep. Elizabeth Dickerson, D-Rockland said the hit to Rockland could be more than $1 million.

"Property taxes are not reflective of an individual's ability to pay, but rather reflect property value. It is not fair to ask property owners to foot the whole bill for the state. At first glance, without revenue sharing, residents in a median home in our district could see their property tax bills go up by close to $500," she said in an email.

The Legislature is expected to vote on the budget between April and June. The proposal requires a two-thirds super majority to pass.

Courier Publications reporter Juliette Laaka can be reached at 594-4401 ext. 118 or via email at jlaaka@courierpublicationsllc.com.

 

 

Comments (1)
Posted by: John A. Thibodeau | Jan 18, 2013 16:05

RSU's hit includes $900,00 just for retirement funds?  That in itself is outrageous.  Maybe it's time to review these rich benefit plans.

 



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