Welcome to the state budget shell game
Gov. Paul LePage's proposed state budget does not simply cut spending or taxes.
Instead, it takes budget problems in Augusta and drives them down the road to Rockland, stopping on the way to sprinkle budget problems on every community between here and there.
Municipal and school officials across the state are slinging the figures around like arrows as the budget battle begins.
"The biggest injury to the towns and cities is the governor's proposal to completely eliminate the distribution of municipal revenue sharing beginning in July 2013," the Maine Municipal Association notes in a Jan. 14 memo. "That proposal would discontinue the distribution of $283 million in property tax relief funds over the next two-year period."
This is a big hit. No matter how disinterested in politics you are, the time to sit up, pay attention, start a protest march, letter campaign or at least make some phone calls has arrived.
The state collects sales taxes in your town and then gives some of that money back to the town, hence the term "revenue sharing." For a while now, state government has been raiding revenue sharing to cover its shortfalls, but this is really money that belongs to our communities.
The idea behind revenue sharing is to reduce the amount paid in property taxes, which are not based on our ability to pay but the value of our property. They are often described as "regressive taxes."
City Manager James Smith said in a memo Jan. 15 that coupled with the governor's other cuts to the homestead exemption, commercial vehicle excise taxes and school funding, this could would result in a home valued at $150,000 seeing a $532.74 tax increase. In one year!
The governor has proposed flat funding for schools. The homestead exemption subtracts $10,000 from the assessed value of a primary home in Maine to save home owners money. The idea is to help the working and/or middle class who are not merely buying up properties to increase their wealth. LePage has targeted that except for some funding for those 65 and older.
A number of other revenues are also targeted.
"The governor's proposal delivers a double whammy to all property taxpayers in this state by first jacking up the property tax rate in a variety of ways and then eviscerating the programs that are designed to help people who are having trouble paying their property taxes," the Maine Municipal Association states in its memo.
There would be no way to avoid the tax increase in our community. We would have to eliminate multiple departments in Rockland city government — things like the library — to make up for the lost revenue, Smith said.
"It is not fair to ask property owners to foot the whole bill for the state," said Elizabeth Dickerson of Rockland, who serves as both a city councilor and the District 47 representative in the House.
We agree. For many years, municipal governments have, for the most part, been very frugal and careful in their local budgets, leaving little fat to trim and sticking to funding for essential services like police protection, fire, ambulance, removing snow from the roads and keeping our sewers functional. The state government has mismanaged its budget and instead of solving its problems responsibly just seeks to kick them down the road to more responsible local leaders.
"Clearly, the debates on both the supplemental budget and the biennial budget have only just begun," Dickerson said in an email, "and the cuts proposed by the governor will be a moving target as we begin the debate process. However, residents of District 47 should stay in close touch with me as we move forward, make sure that their voices are carried with me to Augusta if they themselves cannot attend and testify, and I encourage all residents to come together to speak out against these damaging and irresponsible policies that will shove the cost of doing the business of the state onto the property taxpayer, take money away from education, and gut many other programs to offset costs to towns and municipalities — programs that in fact take a large part of their funding from revenues generated in the towns and municipalities."
"Maine is lagging far behind many other states as our nation begins to climb out of the Great Recession," she continued. "We need to take a closer look at policies that foster revenue generating activity through education, technology innovation, and fair tax reform. Passing the buck to the towns and cities is not responsible fiscal policy, and I am committed to being a voice for supporting innovation in our economy, educational opportunity that gives our Maine people the tools to become the next entrepreneurs of our state, and fair and responsible taxation."
Hopefully we can look forward to seeing this radical budget plan amended into something that will work for the people of Maine.