January 16, 2013

How big is LePage's tax bite?

A municipal group estimates all of his new budget initiatives would cost towns and cities $420 million.

By Steve Mistler smistler@pressherald.com
State House Bureau

(Continued from page 1)

click image to enlarge

Gov. Paul LePage gestures during a press conference at the University of New England's College of Dental Medicine Patient Care Center Building, Tuesday, January 15, 2013. A municipal group estimates all of his new budget initiatives would cost towns and cities $420 million.

Gabe Souza / Staff Photographer

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Top 10 affected Maine cities

Below are the 10 Maine cities that would lose the most money in fiscal year 2014 if Gov. LePage sucesssfully ends the state's municipal revenue-sharing program. The fiscal year begins July 1:

• Portland $9.1 million

• Lewiston $6 million

• Bangor $5 million

• Auburn $3.6 million

• South Portland $2.7 million

• Sanford $2.6 million

• Augusta $2.5 million

• Biddeford $2.3 million

• Waterville $2.3 million

• Westbrook $2.2 million

Overall, Herman said, the budget unwinds policies that were designed "to take the regressivity out of the property tax."

"Systems have been designed as a matter of tax policy to blunt or soften the property tax," he said. "This budget takes us in a completely different direction."

It's unclear which of the governor's proposals will receive support from state lawmakers.

LePage's revenue sharing suspension is already receiving a cool reception from Republican and Democratic lawmakers alike.

Democratic leaders, who control the Legislature, have immediately dismissed the provision, which MMA estimated would shift $283 million in lost revenue to property taxpayers.

Augusta Sen. Roger Katz, the assistant Senate Republican leader, has said he's not a "big fan" of suspending municipal aid. Katz, the former mayor of Augusta, said he was familiar with the struggle of stringing together a municipal budget.

However, Katz has said there is a need for municipalities to consolidate services to ease the property tax burden. He said towns traditionally resist consolidation proposals, but the state's overall budget picture has heightened the need to share resources.

Senate President Justin Alfond and other Democratic leaders have been highly critical of the budget, calling it "the biggest tax increases that the state has seen in a very long time."

Herman said the response from legislative leaders has been reassuring. However, he worried that "raiding" municipal resources was becoming a trend for state lawmakers. He noted that former Gov. John Baldacci and two previous legislatures had plucked nearly $40 million from the state's revenue sharing fund to balance previous budgets.

Herman said it may be difficult to completely wipe out the governor's proposals even if they prove unpopular.

"As soon as the governor puts proposals like this into a budget, there is the immediate requirement to buy them back," Herman said. "It creates a whole new set of difficulties.

"It's created a threat, there's no doubt about it," he said.

 

Steve Mistler can be contacted at 620-7016 or at:

smistler@pressherald.com

Twitter: stevemistler

 

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