PORTLAND – One of the biggest issues for all municipalities in the upcoming session is protecting revenue sharing.
The idea behind revenue sharing is that 5 percent of all state sales and income taxes — or about $140 million — is supposed to be allocated back to municipalities, whose share is determined by population and the community’s full-value property tax rate.
Eighty percent of that amount goes to all municipalities, while the remaining 20 percent is additional revenue for communities with property tax rates higher than $10 per $1,000 of assessed valuation, according to Geoff Herman, director of state and federal relations for the Maine Municipal Association.
But lawmakers have “raided” about 30 percent of that fund over the last four years to balance the state’s $6 billion, two-year budget, Herman said.
Senate President Justin Alfond said he will advocate to fully fund revenue sharing over the next two years, even though total revenue projections are down about $138 million over that period.
“I’m absolutely going to keep it a priority,” said Alfond, who represents Portland. “When we fully fund revenue sharing, every community wins.”
Portland received the most money through revenue sharing — $7.7 million — in fiscal 2008, but that figure dropped to a low of $5.93 million in fiscal 2011, according to City Hall spokeswoman Nicole Clegg.
Last year, the city received $6.1 million in revenue sharing and is projected to receive $6.17 million this year, Clegg said.
“Of course, during the state budget process, this number can change as it has changed in recent sessions,” she said.
But Mayor Michael Brennan — along with leaders in other high-value communities — are trying to make sure that doesn’t happen. Portland has an added incentive.
Alfond sponsored a bill that was approved in the last session to increase the share of money going to high-value communities like Portland. But the bill will only take effect if the Legislature doesn’t transfer revenue-sharing funds to fill the state’s projected budget gap.
Under Alfond’s measure, in order to be eligible for additional revenue-sharing funds as a high-value community, a town’s tax rate would have to exceed the state average, which is now about $12 per $1,000. That’s higher than the present threshold of $10, which means the revenue-sharing funds would be divided among fewer communities.
Portland’s tax rate is $18.82.
Brennan said that by increasing the threshold for the additional revenue, more money would be available to the remaining communities.
“Obviously, Portland is well over ($12). As a result, that (change) would be beneficial to us,” he said.
Staff Writer Randy Billings can be contacted at 791-6346 or at: