MILLINOCKET, Maine — Gov. Paul LePage’s decision to withhold Sudden and Severe Impact funds from Millinocket might be the first time in the law’s 15-year history that a governor has intervened in the money’s distribution, according to the Maine Municipal Association.
“As far as we know, no governor has done this since the law was enacted in 1997,” MMA spokesman Eric Conrad said Thursday. “No governor has ever withheld funds before.”
A voluntary membership organization offering professional services to Maine’s local and state governments, MMA worked with legislators to craft the law, which allocates state aid to municipalities that suffer drastic losses to their tax base, such as the devaluation of Millinocket’s paper mill that resulted from its sale to a New Hampshire investor.
Among the authors’ aims: to take politics out of the process, Conrad said.
“Prior to the enactment of the law, with each property tax loss, each and every time municipalities had to go to [state officials] and [the] Legislature and ask that education funding and revenue sharing funds be preserved so they didn’t suffer severe” economic loss, Conrad said.
MMA officials estimate that municipalities have used the funding about a half-dozen times since the original bill’s passage, Conrad said.
LePage is withholding about $216,000 of a $720,000 Sudden and Severe Impact allocation to Millinocket because he believes town officials broke their word to pay $50,000 annually to the operation of the East Millinocket-based Dolby landfill, LePage spokeswoman Adrienne Bennett has said. The state’s assumption of ownership of the landfill was a key element of the state-engineered sale of the East Millinocket and Millinocket paper mills in October, which has restored about 220 jobs to the region.
State officials sought to contribute $150,000 to landfill operations annually, with East Millinocket and Millinocket contributing $50,000 each in cash or in-kind services.
One of LePage’s biggest motivations is his belief that Millinocket leaders overvalued the mill for several years before the sale, Bennett has said.
Town councilors say LePage lied as part of efforts to bully them out of money their community is legally owed. An array of paperwork, and their Dec. 20 resolve to allocate $50,000 to landfill operations, shows that they never agreed to more than a single payment, they have said.
East Millinocket officials said Wednesday that they never agreed to indefinitely fund Dolby, but pledged to work with LePage and do whatever they could to keep the landfill and the mills operational.
Millinocket’s councilors maintain that the Dolby landfill and the allocation are unrelated and that the mill’s valuations have been agreed to by all parties involved, including state government, for several years. They say the governor has no business inserting himself into the allocation or mill valuation processes.
Having not been a part of the dispute or the negotiations from which it arose, Conrad said he and MMA’s attorneys could not judge whether LePage’s withholding of the $216,000 is legal.
“The law spells out what should happen and the governor’s role in this is not defined,” Conrad said.
According to the statute, Title 36, Chapter 101, Subsection 208-A, “Adjustment for sudden and severe disruption of valuation,” a municipality “that has experienced a sudden and severe disruption in its municipal valuation may request an adjustment to the equalized valuation determined by the State Tax Assessor … for the purposes of calculating distributions of education funding … and state-municipal revenue sharing.”
The law specifies that the state tax assessor, the commissioner of the Maine Department of Education and the state treasurer directly determine how much Sudden and Severe Impact funding a municipality deserves.
According to the law, municipalities first file a valuation adjustment with the assessor. The assessor determines whether the municipality qualifies and “shall calculate the amount of the adjustment for the municipality,” the law states.
The assessor then notifies the commissioner of the Maine Department of Education and the state treasurer of the municipality’s adjustment. The commissioner’s office determines how much of the adjustment money goes to the municipality’s local share of education funding and the state treasurer and Education Department disburse the money.
Before the law was enacted, the Legislature handled individually each municipal appeal for help in dealing with sudden tax valuation losses, Conrad said.
He said he believes that the law improved government efficiency and saved municipalities money by turning a legislative process into an administrative function.
“There are less political considerations now because the guidelines are in writing, the tax assessor assesses whether they have been met, and then the funds are distributed,” Conrad said. “It has been good for the municipalities and the Legislature. [Legislators] didn’t want to be dealing with [funding requests] one at a time. Now it is a process.”