After fiery debate, Maine House votes to advance $40 million restoration of revenue sharing

House Speaker Mark Eves, D-North Berwick
Christopher Cousins
House Speaker Mark Eves, D-North Berwick Buy Photo
Posted Feb. 06, 2014, at 1:39 p.m.
Last modified Feb. 06, 2014, at 3:54 p.m.

AUGUSTA, Maine — After a bitter floor debate, a measure to restore $40 million in state funding to Maine cities and towns advanced Thursday with a 114-21 preliminary vote in the House of Representatives.

Republicans used procedural moves four times in attempts to delay a vote on the bill or send it back to committee for revisions, but Democrats were able to force a roll call. Despite loud protests from Republicans who called the bill “irresponsible” and “rushed,” many GOP state representatives ultimately joined the majority Democrats in supporting the measure. Five Republicans and one Democrat who were present for quorum call were absent during the vote.

Additional votes will be held in both the House and Senate.

Municipal revenue sharing is the second-largest source of state cash for municipalities. If lawmakers don’t approve the bill or a similar proposal, Maine’s towns and cities will see a 79 percent cut in state funding in just two years.

If the numbers hold in the House during subsequent votes, the support would be enough to override a certain veto by Republican Gov. Paul LePage, who opposes the bill and has called revenue sharing “welfare for municipalities.”

A two-thirds majority also would be required in the Senate to override a veto.

The bill, LD 1762, was drafted by the Democratic chairmen of the budget-writing Appropriations Committee, Sen. Dawn Hill of Cape Neddick and Rep. Peggy Rotundo of Lewiston. It moved out of committee earlier this week in a contentious party-line vote, with the eight Democrats on the committee supporting it and five Republicans opposed.

The split vote is rare for the Appropriations Committee, which historically has achieved some degree of bipartisan consensus before moving spending measures to the full Legislature. The committee voted unanimously last year on a compromise $6.1 billion biennial budget that passed over LePage’s objections and veto.

That two-year budget included a $40 million cut to revenue sharing in 2015 if the Legislature could not find a way to fill the gap. The budget already reduced revenue sharing by more than $30 million, from about $96 million in 2013 to about $65 million the first year; if the $40 million hole isn’t filled, the total amount of state aid to cities and towns will fall to about $20 million in the second year.

LD 1762 would fund the restoration with $21 million from the state’s rainy day fund and $4 million from another account designed to accumulate budget surplus until enough is on hand to pay for a reduction in the state income tax. The remainder of the $40 million will be funded by new revenue predicted in recent forecasts, a move Republicans have called risky because that money is not yet in state coffers.

In January, dozens of municipal officials testified for hours that they could not absorb further state aid cuts.

“My communities have let me know this is a No. 1 priority for them,” said Rep. Roberta Beavers, D-South Berwick, during the floor debate. “They are already sharing services with other towns and will continue to do that. They can’t cut anymore.”

The measure sparked fiery debate in the House of Representatives on Thursday. Democrats who supported the bill said the measure was crucial to avoid painful property tax increases for municipalities that are putting together budgets now and need to know immediately how much state money they’ll receive.

Republicans argued the revenue-sharing problem is one for next year, and that the Legislature should focus instead on this year ’s shortfall.

The top Republican on the Appropriations Committee, Rep. Kathy Chase of Wells, told lawmakers that the bill is “irresponsible” because it promises this year’s revenue, which might be needed to fill this year’s budget shortfall, to fund a municipal revenue-sharing cut that won’t take place until next year.

Many other GOP lawmakers, including House Minority Leader Ken Fredette, R-Newport, said there was no need to vote on the bill Thursday because other issues are more pressing — including a roughly $78 million budget shortfall this year at the Department of Health and Human Services.

“The Appropriations Committee has barely met for a month. We have 2½ months left in session,” he said. “We have 2014 bills coming due and payable very soon, mostly to the Department of Health and Human Services. … That is the issue, and I think that’s the issue that should be before us today.”

Rotundo said the bill is being presented at the proper time because the budget called on lawmakers to address the $40 million cut during this session.

“This is part of the biennial budget,” she said. “This is part of the promise we made. This is not rushed.”

LD 1762 includes a plan to restore the money taken from the rainy day fund by adjusting the formula the state uses to invest any budget surplus each year. The bill would make the state pay back the rainy day fund before surplus revenue went to any other account.

Finance Commissioner Sawin Millett has said depletion of the rainy day fund could result in a downgrade of the state’s bond ratings. If $21 million is taken for revenue sharing, the fund will be left with $38.7 million, its lowest point since 2011.

Rep. Joyce Maker, R-Calais, said she didn’t want to vote on the issue Thursday, but that Democrats forced her hand.

“I’m very disappointed. I have a lot of friends on both sides of the aisle, and I respect them dearly. I just feel that this is somehow a political way of dividing us all,” she said. “I’m supporting this bill but under duress.”

Fredette said Maker’s statement could go for most of the roughly 30 Republicans who voted for the bill. He said Republicans support revenue sharing as much as Democrats, but took issue with the process by which the bill was advanced — a vote in the Appropriations Committee that was held without any Republicans present and a roll call in the House forced over GOP objections.

“Most of the people get the fact that this process makes no sense,” Fredette said after Thursday’s vote was called. “Democrats turned this whole process on its head.”

House Majority Leader Seth Berry, D-Bowdoinham, said he didn’t expect the bill to see as much Republican support as it did, but was happy to have them on board.

“After all the shenanigans, I was surprised, but I’ll take it,” he said in an interview. “It matters a lot more what we do here, than what we say.”

After the initial vote Thursday, representatives will have until 2 p.m. Friday to offer amendments. The bill will be subject to a second debate in the House next week before additional votes in both the House and Senate.

Follow Mario Moretto on Twitter at @riocarmine.

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