AUGUSTA, Maine — The Legislature’s Taxation Committee took initial votes Friday against Gov. Paul LePage’s proposal to eliminate revenue sharing for two years as part of his two-year budget package.
The committee voted 6-3 along party lines to remove the revenue-sharing suspension from the budget for the next two years. Democrats and an independent legislator, Rep. Joseph Brooks of Winterport, voted to remove it while Republicans opposed the move.
The vote to remove revenue sharing will become part of the Taxation Committee’s initial report back to the budget-writing Appropriations Committee with recommendations for taxation initiatives in the budget. That initial committee report won’t represent a balanced budget, since committee members Friday didn’t propose alternatives for filling the $198 million budget hole the revenue sharing elimination was intended to fill.
Committee members pledged to work in the coming weeks to devise an alternative way to balance the budget, though no consensus appeared to emerge Friday. The Republicans who voted to keep the revenue sharing elimination in the budget said they didn’t favor the elimination. However, they said, they couldn’t send an unbalanced budget report back to the Appropriations Committee.
“We’ve been charged with setting up a balanced budget, and we’ve got this arbitrary time limit to go to Appropriations with recommendations,” said Rep. Gary Knight, R-Livermore Falls, the committee’s ranking Republican. “I … sincerely believe in the next two or three weeks we’ll have a solution to take care of this problem.”
Rep. Donald Marean, R-Hollis, said he wouldn’t support eliminating revenue sharing on the House floor if it survived in the budget proposal.
But, “this is the only solution we have right now,” he said. “I promised my towns I wouldn’t vote to cut revenue sharing.”
Democrats said they wouldn’t endorse a move to cut a municipal revenue source that helps to keep local property taxes down.
“Property taxes are absolutely the worst tax that I would vote to raise,” said Rep. Adam Goode, D-Bangor, the committee’s House chairman. “We have a lot of options here. If I was to vote to raise a tax, the property tax is absolutely the worst direction I would go in.”
Sen. Doug Thomas, R-Ripley, said municipalities are going to have to sacrifice something as part of the effort to balance the state budget. Raising taxes to balance the budget won’t work, he said.
“I hate this idea of cutting revenue sharing as much as anyone here, but we have got to pull together to get this problem solved,” he said. “If we have exempted local government, we have exempted a big portion of the people we need to pull this together.”
In addition to LePage’s revenue sharing proposal, Taxation Committee members voted earlier this week against two other budget items that would scale back property tax relief programs.
The vote Friday afternoon followed a public hearing in the Appropriations Committee on two bills that would gradually restore revenue sharing to full funding and change state law so lawmakers can’t dip into state funds set aside for revenue sharing for other purposes.
The state has directed a percentage of its sales and income tax revenues to municipalities for about four decades in an effort to control municipal property tax burdens. When fully funded, towns and cities receive 5 percent of income and sales tax receipts. For the past four years, however, the Legislature has used revenue-sharing funds to balance the state budget.
One bill, LD 713, sponsored by Sen. Roger Katz, R-Augusta, would gradually restore revenue sharing to 5 percent of sales and income tax receipts by July 2015. The other, LD 940, sponsored by Senate President Justin Alfond, D-Portland, would make the two state funds that hold revenue-sharing dollars irrevocable trusts so lawmakers can’t dip into them for other purposes.
Gov. Paul LePage on Friday criticized Democratic legislators for proposing no alternatives of their own to his proposal to suspend revenue sharing. In his weekly radio address, he also repeated his call for municipal leaders to streamline local government.
“Mainers like home rule, but it is expensive,” LePage said. “The state cannot continue to subsidize the costly duplication and redundancy of services in our largest communities.”