AUGUSTA, Maine — In what has become an annual event, municipal officials from around the state descended Wednesday on the State House to lobby against proposed cuts to state aid that they say will hurt towns’ and cities’ ability to provide essential services.
The revenue sharing program, established in 1972, was created to distribute 5 percent of state income and sales tax revenue to municipalities, but it has not been fully funded for years. After revenue sharing became a political football last year, an agreement was reached to fund the program — at 40 percent.
Gov. Paul LePage’s proposed budget would eliminate the revenue sharing program by 2017.
For years, the state has looked to tap the revenue sharing fund when it needed to save money. The roughly 45 municipal officials who testified against the cuts during a public hearing with legislative budget negotiators conveyed a sense of fatigue from fighting the same fight every year.
“Here we are again,” said Greg L’Heureux, finance director of South Portland.
While LePage has made constant calls for towns and cities to tighten their belts, many officials said Wednesday that towns and cities have already cut spending and services to the bone. The only way they could absorb more cuts to state funding, they said, was with property tax increases.
L’Heureux said large service centers such as Portland, South Portland, Bangor and Lewiston-Auburn are the state’s economic engines and do much of the work to attract businesses and create jobs.
“These continued reductions are simply passing the buck on to local property budgets and making it harder for our economic engines to produce,” he said. “If you tax businesses too greatly, then they move.”
LePage has argued that eliminated revenue sharing funds will be replaced by expanded, targeted property tax credits, especially for seniors. But Brownville Town Manager Matthew Pineo said those programs would not help his town maintain the services required by state mandates.
He also said a LePage proposal to let towns tax large nonprofits would do nothing for Brownville.
“There is no need to keep playing shell games,” he said. “I’m in a poor community. We do not have money. I don’t have any taxable charities in my town.”
LePage also has called for municipalities to find savings by consolidating services with their neighbors. Judy East, executive director of the Washington County Council of Governments, said that the 44 Down East towns already do.
“There’s already significant regional collaboration on emergency response, dispatch, solid waste management, and there has been for many years,” she said.
If revenue sharing is eliminated, she said, “taxes will go up or services will go down. There is no padding left in rural municipal budgets.”
State Finance Commissioner Richard Rosen has said the revenue sharing cuts must be considered “in the broader context” of LePage’s efforts to cut taxes for individual Maine people and businesses.
Follow Mario Moretto on Twitter at @riocarmine.