May 26, 2018
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Should towns give money to charitable agencies? Some in the midcoast say no

By Abigail Curtis, BDN Staff

SWANVILLE, Maine — Two weeks ago, Dan Horton was a man on a mission.

A year ago, residents at Swanville’s annual town meeting debated and agreed to stop funding social service agencies. This year, when selectmen decided they wouldn’t even let town voters discuss funding such agencies, Horton took matters into his own hands.

“I said, well, that’s unacceptable,” recalled Horton, who started gathering signatures for a petition to give residents the chance to say yea or nay to the nonprofit groups that had asked for a small slice of their property tax dollar.

Swanville wasn’t the first town in the midcoast to stop funding social service agencies. It is following in the footsteps of Knox County communities Hope and Rockport. All three towns have instead given residents an opportunity to donate to those agencies on the form they use to pay their tax bills.

Horton and others around the state feel that the communities are setting a dangerous precedent that undermines the mission of non-profit agencies. Still others think letting individuals decide for themselves is the fair thing to do.

Horton, a Swanville resident and member of the Waldo County YMCA’s board of directors, said he easily gathered 65 signatures to have residents reconsider having the community fund the agencies.

“It was not difficult to get the signatures, as soon as you made people aware,” he said.

During the debate at last Tuesday’s Swanville town meeting, a majority of the 40 residents present decided they preferred the new method.

But Horton believes that was the wrong thing to do. Through their tax forms, residents opted to give organizations such as the Pine Tree Chapter of the American Red Cross, the Waldo County Community Action Program, the Belfast Free Library and the YMCA just $1,300 in 2010. The amount was a far cry from the $26,000 that had been funded through the town in 2009.

Horton said the YMCA alone provides more than $4,000 in scholarships to people from Swanville annually and also makes its popular teen room completely free to everyone, including kids from his town.

“By funding this through the municipality, you have pride of community,” he said. “We are a caring community. People in the town office right now just expect that all the social services are going to continue, expecting that other people are going to pick up the burden … the social services are your safety net for society.”

‘Enough is enough’

In Maine, the town meetings that commence in March’s mud season are a chance to see democracy in action. It’s one resident and one vote, and every vote counts when, as seems usual, a small percentage of the town’s population comes out on Saturday morning for the meeting. There, in the elementary school cafeterias and old town halls, townspeople can and often do argue for a long time about how to spend the shrinking portion of the municipal budget that they can control.

Eric Conrad, spokesman for the Maine Municipal Association, said that although the organization does not keep statistics on social service spending, officials there have noticed that the frequency of people questioning such appropriations at town meetings and municipal officials stopping the contributions is up.

“Every municipal spending item is being closely examined, even things like $100 or $200 for a food pantry or animal shelter,” he said. “The trend started two or three years ago, when the economy went sour and municipalities felt the brunt of that.”

The state has cut revenue-sharing to municipalities by more than 30 percent in the past several years, an amount worth tens of millions of dollars, he said. Additionally, most communities have very little say over the school budget, which the state has never funded at the 55 percent level voters told it to do back in 2004.

“Both these things have put tremendous pressure on property taxes,” he said.

Swanville select board Chairman Brian Thompson can attest to just how hard it is becoming for towns to balance their budgets right now. At last year’s town meeting, residents voted to slash municipal spending, cutting out all social service spending as well as major things like money for road repairs and solid waste removal. Last week, they added some money back, but he said he’s not surprised that social service spending didn’t make the cut.

“I understand these services. They’re wonderful services. But as people said, don’t make your neighbor pay for something you want,” he said. “I think it was correct, the townspeople saying, ‘Enough is enough.’”

Thompson said he believes agencies are using scare tactics when they claim that losing the “little bit” Swanville would donate hurts them.

The Waldo County YMCA, which asked the town for $2,500, is one example of an organization that he believes has its budget done before it asks for cash at the Swanville town meeting.

“Ours is a nice little bonus,” he said.

But that’s not the case at all, according to Horton, who sits on the board of that agency. He said the YMCA anticipates both its costs — such as fuel and programs — as well as its revenue, such as money from Swanville. Those municipal funds are used as leverage for grants and for federal and state funding.

“It’s very important,” he said of the local dollars. “Monies that come from federal and state governments are based on what comes from community involvement.”

Erin Merrill, executive director of the Pine Tree Chapter of the American Red Cross, said that last year the organization raised about $80,000 through the 304 cities and towns that support it.

That sum is more than 10 percent of the $750,000 annual budget.

Merrill said she is noticing that more communities are not funding agencies through their budgets.

“We realize that it does impact our bottom line, but it doesn’t impact our services. If there’s a fire in Swanville, we will still respond. That’s what we do,” Merrill said.

So far this year, the agency has helped more than 203 people statewide recover from disasters such as house fires, which on average cost it $1,200.

“We rely on a donated dollar to provide the services,” she said.

Merrill said the Red Cross understands that it’s tough financially in a lot of communities right now, especially because they still must provide general assistance to their residents. Because of the bad economy, the agency won’t increase its municipal requests of between 50 cents and $1 per person, per town, this year, she said. Instead, it will ask for more donations from the general public.

“We know that times are tough,” she said. “We’re grateful for whatever assistance we can get.”

‘A unique way to do it’

Swanville recently joined Hope and Rockport in shifting away from funding social services.

In 2007, Hope adopted the new system, which stopped funding social services through the budget and instead allowed residents to individually add money to their tax bill to support any of 10 social service agencies. Rockport followed in 2009 with the same system, and Swanville last year.

“We were the first to jump,” said Jonathan Duke, the Hope town administrator. “It’s a way to answer the calls and the questions that people have about funding these agencies. The old argument is that ‘If I want to fund that, I’ll write a check myself.’ We provide people with the opportunity to do just that. It’s kind of a unique way to do it.”

In the last tax year before the new system took hold, Hope municipally gave $1,200 to social services agencies. But in the new system’s first year in 2008, some of Hope’s 1,100 property taxpayers individually chose to give a total $1,600 to the 10 agencies selected.

“It ended up being a bigger plus for those agencies as a whole,” Duke said. “But recently, with the recession, we haven’t seen that.”

In 2009, taxpayers gave $500 altogether to these groups.

Duke said he was on the Rockport Select Board when it voted to adopt the strategy, and he argued against making the switch. Larger towns often have entire departments to do things that the independent agencies do in smaller towns such as Rockport, he said. In the smaller towns, such agencies can run programs such as Little League and visiting nurses.

“Those agencies are important. If we can pay $25 and help them get $25,000, that’s good for us,” he said.

He said he didn’t believe that paying property tax entitles the taxpayer to only support entities he or she personally agrees with.

“If everyone had that choice, everyone who doesn’t have a kid in school wouldn’t spend a dime [on education],” he said. “We’re in a social compact. In hard times, it’s a hard thing to look beyond tomorrow. It’s hard to have vision. … But you’ll want those visiting nurses. Maybe in 20 years, you’ll need them.”

When Duke was on the Rockport board, he argued that people wouldn’t pay for these things if it wasn’t done through their property taxes.

“It ends up being a very little amount, but it really is a philosophical question,” he said. “It’s really a very, very small part of someone’s tax bill, and it was dominating the conversation.”

‘Ratcheting back’

Rockport Town Manager Bob Peabody said the community had been “ratcheting back” its level of giving to those agencies before June 2009, when the board voted to stop giving money as a town. He agreed with Duke that it was a philosophical as well as a practical decision.

In a town with a taxable valuation of $1 billion and with a median family income of $56,068 in the year 2000, it could be argued that Rockport taxpayers have the ability to fund social services through their property tax payments. Maine’s statewide median household income for 2008 was $46,419, in comparison.

“Some people felt that it could be considered forced giving, that all taxpayers may not agree with giving to certain provider agencies. It’s more appropriate for people to make their own decisions,” Peabody said. “The other side of the argument is the good that provider agencies do. Some folks felt that if you did a cost-benefit analysis, that Rockport got back more than it gave.”

Nineteen social service agencies asked Rockport for more than $34,000 in funding for the 2006-07 fiscal year. At that year’s annual town meeting, residents approved spending about $22,000 instead, monies that were spread among agencies such as the Teen Center, New Hope for Women and Camden Area District Nursing.

But beginning in July 2009, no money was appropriated by the town, and residents were given the choice of adding dollars to their property tax bills for one of 10 provider agencies. Since then — 20 months altogether — taxpayers have donated a total of just $2,154.

“It’s not an easy question,” Peabody said. “It’s not a matter of being necessarily cheap or not cheap.”

Many nonprofit agencies, including Penobscot Bay Medical Center, are located in town and do not pay property tax, he said.

Kathleen Morgan, executive director of the midcoast domestic violence project New Hope for Women, said she has noticed a roughly 20 percent decrease in municipal funds over the last decade, including the recent drop from Rockport, which used to give a couple of thousand dollars annually. Town support accounts for nearly 4 percent of the nonprofit’s annual budget.

“It’s a terrible dilemma that people are facing, with having to decide where to put their funds,” she said. “I also, of course, work in a field where we see the results. We’re being asked to do more with less. It’s very difficult. The need grows and the funding shrinks.”

The Rockport Select Board simply decided that private donations would do more for nonprofit organizations than taxpayer dollars could, said Select Board member Alexandra Fogel, who voted against making the change.

“They support most of our nonprofits heavily,” she said, referring to other forms of private donations, “in this community, and even in poor communities.”

She said the board is under “tremendous pressure” to keep budgets flat-funded right now while struggling with the usual municipal malaise of reduced revenues and increased costs. Although Rockport has high property values, she said, a large percentage of schoolchildren are still eligible for free and reduced-price lunches, a marker of poverty.

“We’re battling against everything. It isn’t that most of us don’t support our nonprofits individually,” she said. “It certainly saddens me. We’d like to pay for services that we get. But it’s hard times now, really. Even for wealthy towns.”

‘Every dollar matters’

Tarren Bragdon of the conservative think tank the Maine Heritage Policy Center, said he thinks it’s good that towns are taking a tougher look at how they’re spending property tax dollars.

“At a time that families are struggling to make ends meet, every dollar matters,” he said. “This sounds like a common-sense solution. If individuals want to donate to needy charities, they can. But it’s not the proper role of local government to force individuals to donate to private charities through their property tax bill.”

He said he suspects that many people from places like Rockport are still making charitable donations, just not through their property tax form. Bragdon also believes that the harder scrutiny also makes some of the charities think “even more” about how they try to ask for money from individuals.

“I think that’s a good thing. They’re making the case that this is a worthwhile investment for people’s hard-earned dollars,” he said.

But Christopher St. John of the Maine Center for Economic Policy, a progressive organization, said he believes there is a “fundamental misunderstanding” of how social services happen and he calls the belief that private charity can take care of all social problems “ludicrous.”

“The evidence is clear that private charity simply will not be enough to address the needs,” he said.

One example he gave is that of hunger, with about $10 million worth of food delivered through church or town food pantries in Maine annually. In comparison, St. John said, food stamps purchase as much as $200 million in food.

“The order of magnitude is just so much greater,” he said.

Possible decreased state and federal support for social service agencies means they will be even more strapped for cash in the future, according to St. John. Although he does not think it’s fair that a disproportionate burden be placed on municipalities, he also made the point that it’s in the best interest of townspeople to look after their neighbors.

“Some municipal voters will be persuaded that it’s not our business,” he said. “In the end, these problems are in our communities.”

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