All eyes on LePage as $40 million revenue-sharing bill clears final votes in Maine House, Senate

Posted Feb. 13, 2014, at 10:25 a.m.
Last modified Feb. 13, 2014, at 1:51 p.m.
Alex Willette, R-Mapleton, is assistant Republican leader in the Maine House.
Contributed photo
Alex Willette, R-Mapleton, is assistant Republican leader in the Maine House.
Rep. Kathleen Chase, R-Wells
Rep. Kathleen Chase, R-Wells Buy Photo
Rep. Peggy Rotundo, House Chair of the Appropriations Committee
Rep. Peggy Rotundo, House Chair of the Appropriations Committee Buy Photo
Gov. Paul LePage
Kevin Bennett
Gov. Paul LePage Buy Photo

AUGUSTA, Maine — The Maine House and Senate cast final votes Thursday to enact a measure to restore $40 million of state funding assistance to municipalities in 2015.

The House voted 120-17 in favor of the measure. Shortly thereafter, the Senate passed the bill without a roll call. The bill now heads to Gov. Paul LePage, who has until Feb. 25 to decide whether to veto the bill or let it pass into law.

The bill, LD 1762, sailed through the House and Senate with broad support. Despite protest by some in the GOP who take issue with the bill’s timing and funding mechanism, wide swaths of the Republican caucuses in both chambers have joined majority Democrats in supporting the bill.

House Minority Whip Alex Willette, R-Mapleton, who voted for the bill, said he and many members of his party felt backed into a corner by Democrats, who had used their majorities on the Appropriations Committee and in the Legislature to muscle the bill through the process.

“Being in the minority party, sometimes we’re just kind of along for the ride,” Willette said.

The measure, proposed on party lines by the Appropriations Committee, would fund the restoration with $21 million from the state’s rainy day fund, $4 million from a fund designed to accumulate budget surplus with the eventual goal of reducing the state income tax and $15 million from new, unappropriated revenue predicted in a December revenue forecast.

LePage’s opposition to the bill is well-known, but his office offered no comment Thursday on the governor’s intentions with the bill. Speculation has been rampant, with reports surfacing early last week that the governor would break out his veto pen, only for those comments to be walked back in following days.

“We hope he’ll do the right thing. Our communities are in crisis” said Rep. Peggy Rotundo, D-Lewiston, who drafted the bill along with Sen. Dawn Hill, D-Cape Neddick.

Regardless, the roll calls taken in the House and Senate suggest that lawmakers would easily overturn a veto, although Republicans in the past have changed their votes to back the governor’s veto.

LePage has pledged to withhold up to $100 million in bonds meant to spur transportation infrastructure projects — a key priority for the governor last summer — and in his recent State of the State Address LePage cites the concern of Finance Commissioner Sawin Millett, who says a reduction in the rainy day fund will result in less-favorable bond rating.

Democrats on the Appropriations Committee have pushed back on Millett’s claim, saying that the state’s bond rating does not rise and fall on any one factor alone.

If the $40 million is not restored as imagined in the current biennial budget, total state revenue sharing will dip just below $20 million in 2015, representing a nearly 80 percent reduction in state aid to municipalities in two years.

The Maine Municipal Association had pulled out all the stops to lobby lawmakers to support the Appropriations bill, even going so far as creating a brief video advertisement featuring selectmen and town councilors from across the state, saying the reduction in revenue sharing would result in higher property taxes.

Revenue sharing was already greatly reduced in 2014, and municipal officials have said that further cuts would result in elimination of essential local services, increased property taxes or both.

In Bangor, a reduction in revenue sharing would mean that instead of receiving $2 million from the state, the Queen City would receive just under $700,000.

Bangor Mayor Ben Sprague, in a news release issued by the Maine Mayors’ Coalition, called the revenue-sharing program, which sends a portion of state sales tax revenue back to towns and cities, “a key element in the partnership between state and local government.”

“Our communities provide the infrastructure necessary to grow Maine’s economy,” Sprague wrote. “The state, through revenue sharing, shares the proceeds generated by that activity, allowing us to maintain our infrastructure while keeping property taxes at reasonable levels.”

The difference is smaller in less populous towns and cities throughout Maine, but local officials say the lost revenue would be just as devastating on local budgets.

Fort Kent would see its state aid drop from $193,000 to $64,000 without the revenue-sharing bill, while Benton would see a reduction of $42,000.

Rep. Kathy Chase, R-Wells, the ranking Republican on the Appropriations Committee and one of the few House members who voted against the bill, said Thursday that lawmakers should now turn their attention to the roughly $57 million budget hole that must be filled by July.

“We should have been looking at that to begin with,” she said. “We have a very short window and very limited funds to deal with 2014. This revenue-sharing bill took some of those funds away.”

Follow Mario Moretto on Twitter at @riocarmine.

 

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