Bill to prevent property tax hikes wins initial approval in House

Municipal revenue sharing measure keeps promise made in budget

 AUGUSTA – A measure to keep the state’s funding promise to Maine communities won initial approval by a vote of 114- 21 in the Maine House on Thursday.  

LD 1762 would prevent further property tax increases for Maine communities and local property taxpayers by protecting $40 million in revenue sharing funds.  If the Legislature does not blunt cuts to revenue sharing, funding for towns will decline 79 percent by 2015.

“Local communities across our state are hurting. Their budgets are stretched to the limit and their property taxpayers cannot afford a property tax hike,” said Rep. John Schneck, D-Bangor. “Our cities and towns, our middle class and our small businesses are relying on the state to keep its promise to local communities.”
 
The loss would result in $29.8 million in cuts to local education and a $10.8 million increase in property taxes on business. Under the LePage administration, state revenues have increased, but revenue sharing funds for towns has plummeted. 

“These days, to avoid crippling property tax increases, schools are faced with ‘solutions’ such as dramatically cutting programs – foreign languages, library programs, special education support positions, after-school transportation, classroom supplies,” said Rep. Karen Kusiak, D-Fairfield, a former member of the  Board of School Directors of MSAD 49, which serves Albion, Benton, Clinton and Fairfield. “Meanwhile, towns struggle to keep public works and safety programs in place. In Fairfield, about 10 percent of town positions have been cut already – two police officers, one firefighter and two administrative staff.”

More than half of Maine towns have either just begun their fiscal year or will do so while the Legislature is in session.  Many others are facing a June deadline.

During a public hearing in January, hundreds of Maine people, including local community leaders, police officers and firefighters told lawmakers that their communities and property taxpayers are stretched to the brink.

Rep. Stanley Short Jr. has been hearing the same message from local officials in his district, which comprises Clinton, Detroit and Pittsfield. The towns have already made tough cuts in areas like personnel, general assistance, animal control and solid waste disposal while continuing to do the needed work of elections, fighting fires and providing emergency service, he said during the floor debate.

“They have also had to cut back on road repair, salt and sand, building maintenance and repairs to their equipment. The needed replacement of worn-out equipment has been placed on hold,” said Short, D-Pittsfield. “Their surplus funds are depleting very quickly and they know that the raising of property taxes is the only place they can go.”

The measure passed by the Appropriations Committee funds revenue sharing by tapping $21 million from dollars reserved for critical purposes, $4 million by drawing down dollars from a GOP-initiated account reserved for tax breaks for the wealthy and $15 million from new revenue, meaning revenue that was above December’s reprojection and is unappropriated.

The measure faces further votes in the House and Senate. The bill’s sponsors are Rep. Peggy Rotundo, D-Lewiston, and Sen. Dawn Hill, D-York, the chairs of the Appropriations and Financial Affairs Committee.