When Massachusetts voters elected Charlie Baker as their governor in November, Maine’s newly re-elected Gov. Paul LePage was happy to have another Republican in a New England state house.
LePage looked forward to collaborating with Baker on a regional expansion of natural gas pipeline capacity after Baker’s predecessor, Democrat Deval Patrick, effectively stalled the initiative by withdrawing from the regional talks expected to produce a deal.
LePage and Baker might be on the same page about expanding New England’s natural gas pipeline capacity. But they’ve taken starkly different approaches to another topic in the budget proposals they’ve introduced this winter: state and local government relationships.
For the second time in his tenure as governor, LePage has proposed to end revenue sharing with cities and towns. Baker, meanwhile, made it a campaign pledge to restore unrestricted state aid to Massachusetts municipalities, and he’s sticking to it.
In Maine, LePage’s two-year budget would end revenue sharing on July 1, 2016, closing out a decades-long arrangement — violated several times in recent years — in which towns and cities were guaranteed 5 percent of the state’s sales and income tax revenues as a way to defray property taxes and help municipalities provide basic services.
If Maine kept to its four-decade commitment, revenue sharing would total $150 million-$170 million annually over the next few years depending on state revenue collections. This fiscal year, towns and cities are receiving $60 million, or about 41 percent of what state law says they normally should receive, according to the Maine Municipal Association. Under LePage’s two-year budget, they would receive $62.5 million in the first year, starting July 1, before the aid entirely disappears.
As it has in Maine, municipal aid in Massachusetts has slipped in recent years, dropping from 7 percent of state tax revenues in 2007 to 4 percent in 2014. So Baker’s budget boosts what the state calls unrestricted local aid by 3.6 percent, or $34 million. That boost would bring the total aid level to nearly $1 billion.
Baker promised during his gubernatorial campaign last year to boost local aid as state revenues grew. The first time he ran for governor, in 2010, he criticized the Democratic incumbent for cutting it.
“There is nothing more important to the health and safety of our communities than effective local government,” Baker said in February 2014, according to the Springfield Republican newspaper. “My Community Contract will guarantee cities and towns see a local aid increase as state revenues grow and give local officials a seat at the table in a Baker administration.”
His $38 billion, one-year budget proposes to raise aid levels at 75 percent of the rate of anticipated revenue growth. He includes a bump for education aid. In his second year in office, Baker promised, local aid would rise at 100 percent of the rate of state revenue growth.
LePage, meanwhile, contends that much of Maine’s government waste happens at the local level and that state aid should directly relieve property tax burdens rather than subsidize municipal budgets.
“Local officials care about municipal budgets,” he said last month during his State of the State address. “They take money from Mainers to grow the town office.”
Meanwhile, dispensing with the obligation to fund revenue sharing allows the state to claim additional revenue and for LePage to spend it while phasing in his tax cut plan.
In addition to proposing the end of municipal revenue sharing, LePage’s budget flatlines K-12 education aid. Since schools generally represent the largest share of municipal budgets, boosting education aid in the past has proven an effective tactic for reining in property taxes.
The contrast between LePage and Baker couldn’t be starker. One treats local governments as partners and recognize the state’s obligations to them. The other passes the buck to local governments, blaming them for bloat in the absence of more spending restraint at the state level.
The partnership approach, which Maine followed for four decades, is the superior one and a recognition of how government services are delivered.