Deal to restore $40 million in state aid to Maine cities and towns continues to elude lawmakers

By Scott Thistle, Sun Journal
Posted Jan. 29, 2014, at 5:31 p.m.

AUGUSTA, Maine — AUGUSTA — Lawmakers on the Legislature’s budget-writing Appropriations Committee said Wednesday they were still trying to reach a compromise on about $40 million in state funding for cities and towns.

A cut to local revenue-sharing, the money the state sends to municipalities to help ease the burden of property taxes, was built into the current two-year budget if lawmakers fail to reach an accord — or to find the funds to restore that cut before it happens.

Maine lawmakers in 2013 reduced revenue-sharing from about $96 million to about $65 million for 2014; if the $40 million hole isn’t filled, that figure will drop to about $20 million in 2015. Together, the reductions would amount to a 79 percent cut in state funding for municipalities over the two-year period.

For Lewiston, a failure to restore the funding level would mean that instead of $2.6 million from the state in 2015, the city would get $881,030, according to the Maine Municipal Association.

For Bangor, instead of a little more than $2 million, the city would receive $692,550; and for Portland, the change would be from $3.9 million to $1.3 million.

And while the state’s largest cities stand to lose the most, smaller towns and cities across Maine would also have to either tighten their belts or significantly raise property taxes to make up the losses.

Earlier this month, leaders from towns and cities across Maine testified that the cuts would devastate municipal budgets. Some have urged lawmakers to decide sooner rather than later because local leaders are trying to craft budgets in time for voter approval during annual town meetings. Many towns in Maine hold those meetings in March.

Democrats and Republicans from the Appropriations Committee have spent hours in small, behind-the-scenes meetings in recent days to stake out their positions. On Wednesday, Democratic lawmakers and their leaders were meeting to attempt to draw together a solid proposal.

Republicans, too, have been talking among themselves, but so far negotiations haven’t yielded any tangible compromises, or at least none that lawmakers wanted to share.

“I think what that means is the Democrats’ proposal for restoring revenue-sharing is dead on the table,” said House Minority Leader Ken Fredette, R-Newport, on Wednesday.

Fredette said that didn’t mean the conversations around revenue-sharing were over. And while towns and cities should prepare conservative budgets based on a loss of funding, they could restore them if lawmakers reach a compact that sends more money, he said.

“I think the reality, in terms of a town’s budget planning, is no different than school budgets,” Fredette said. He said town managers could work a variety of projections into their budgets.

“We are not telling people how to do that, but they certainly have the ability to do that,” Fredette said. He noted that unsettled amounts of revenue-sharing from the state have been an ongoing budget issue for cities and towns for some time.

“I mean, we’ve been doing this since the Baldacci administration,” Fredette said referencing former Democratic Gov. John Baldacci, who served from 2003 to 2011.

Democrats said they were more eager to reach a deal, in light of the fiscal uncertainty the issue creates for towns and cities.

“We are committed to taking action to prevent further harm to towns,” said state Sen. Emily Cain, D-Orono.

Cain, a member of the Appropriations Committee, said a bill offered by the committee’s House chairwoman, Rep. Peggy Rotundo, D-Lewiston, is meant to prevent further harm to municipalities.

“The goal of this effort has not changed,” Cain said. “It’s still about protecting that $40 million in revenue-sharing for (fiscal year) 2015.”

Sen. Dawn Hill, D-York, the committee’s Senate chairwoman, said she felt a sense of urgency to settle the issue for municipal budget-makers.

“I can’t speak for everyone,” Hill said. “But I certainly feel like it’s very hard for them to go forward, even if it is affecting them in their fiscal year 2015. They have to plan now to be fiscally responsible in terms of knowing what their taxes will be. So, yeah, I feel a sense of urgency.”

Hill questioned how much flexibility towns and cities, which have seen year after year in reductions in state funding, really have.

She said towns may indeed be able to prepare for the worst and hope for the best but, “I don’t think that’s the right place for them to be or to have to go to.”

She said the fiscal anxiety of not knowing is another unfair burden on city and town officials, municipal employees and residents.

The committee is expected to meet again on Thursday, but whether any deals around revenue-sharing will be placed on the table remained unclear Wednesday.

http://bangordailynews.com/2014/01/29/politics/deal-to-restore-40-million-in-state-aid-to-maine-cities-and-towns-continues-to-elude-lawmakers/ printed on October 25, 2014