February 24, 2013

Local officials plan on LePage's cuts not passing

Towns and cities craft budgets as though they will still receive state revenue sharing funds.

By Matt Hongoltz-Hetling mhhetling@centralmaine.com
Staff Writer

At the same time they express vocal opposition to Gov. Paul LePage's proposed elimination of state revenue sharing, many central Maine municipalities are preparing budgets that assume the dramatic cuts won't happen.

Supporters of LePage's proposal say the sacrifice is needed as part of a larger effort to balance the state budget, but opponents say a sudden elimination of revenue sharing, which makes up as much as 29 percent of municipal budgets, will result in large property tax increases and reductions of basic services.

The timing of the state budget process, which legislators say is likely to drag on until the end of the legislative session in June, creates a related problem for communities, many of which present their budgets to voters for approval at annual town meetings starting next week.

Despite the large question mark about state revenues hanging over their heads, most area town leaders have put together budgets that assume revenue sharing will be maintained at roughly the same level as last year.

Waterville's city manager, Mike Roy, said the city budget process counts on revenue sharing of about $1.7 million to eventually come through.

The municipal portion of Waterville's budget is $16.4 million and its total budget, which includes school spending, is $37 million.

"We'll be assuming the governor's cuts will not take effect," he said. "We don't believe the Legislature will agree to pass a state budget that will cause local property tax increases to the extent that the governor's proposal will."

Last month, Waterville Mayor Karen Heck said she didn't believe LePage's proposal to suspend state revenue sharing for two years would pass.

Richard Davis, town manager of Farmington, said it would be irresponsible to create a budget that doesn't include revenue sharing.

He said eliminating roughly $525,000 from the budget would have such a negative impact that the town couldn't reasonably meet the needs of the people it serves.

The municipal portion of Farmington's budget is $4.6 million, and its total budget, which includes school spending, is $8.6 million.

"It would be about half of our police department, or half of our public works department," he said. "Some of our smaller departments, it would wipe them out completely."

When Farmington voters attend their town meeting March 18, they will be voting on a budget that includes the same amount of state revenue as last year, an approach that Davis said most towns are taking.

"I'm counting on the fact that legislators live in communities and pay property taxes as well," he said. "They have to see what the impact would be."

But Jodi Quintero, spokesperson for Mark Eves, D-North Berwick, speaker of the House in the Democratic-controlled Legislature, said local communities shouldn't assume that legislators will be able to protect state revenue sharing from a statewide budget crunch.

"I would be very uncomfortable with telling towns not to worry," Quintero said.

The more active towns are in opposing the governor's plan, Quintero said, the more leverage lawmakers will have to present an alternative plan.

Albion, Oakland and Vassalboro have all come up with budgets that assume a flat level of state funding, while Fairfield has prepared for a slight decrease.

The current draft of Fairfield's budget, which will come before voters May 13, includes $660,000 in state revenue sharing, a little bit less than the $700,000 it received last year.

Town Manager Josh Reny said planning for such a large hit to Fairfield's $5.4 million budget, which is $9 million when school spending is added, was not an acceptable option.

"We couldn't possibly develop a budget proposal based on what's been proposed by the governor, because it really would mean the complete elimination of some town departments," he said.

Reny said he doesn't think the governor's budget will pass as proposed, but he also said it can't be ruled out.

"The state is struggling right now," he said.

If the cuts do go through, he said, town voters would choose between using fund balance reserves as a temporary, one-year solution, or paying more in property taxes.

Harold "Jim" Murray, a Fairfield councilman, said he didn't think the town had gone far enough in cutting the budget.

"We had to pull a number out of the air," he said. "We're only surmising and guessing."

Small towns like Vassalboro and Albion will be especially hard-hit by revenue sharing reductions, according to Mary Lee Rounds, chairwoman of the Albion Board of Selectmen.

"We're so close to the edge all the time," she said. "Because we're a small town, we can't cut what the bigger cities can."

Vassalboro didn't prepare for the loss of about $272,000 in state revenue sharing when crafting its $1.7 million budget, up slightly from the current year.

Albion, which stands to lose about $167,000 in revenue sharing funds in its $2.3 million budget, according to an estimate from the Maine Municipal Association, is also moving ahead with a budget process that assumes flat funding from the state.

If LePage's budget went through, she said, the town would probably react by eliminating some nighttime plowing services and road repairs.

Oakland will try to handle the uncertainty by identifying expenses in the budget that can be delayed, should state revenues be scaled back, Oakland Town Manager Peter Nielsen said.

If revenue sharing does indeed get the ax at some point after Oakland's May 7 meeting, the town will deal with it by putting a halt to planned road work, said Nielsen, who is also vice president of the Maine Municipal Association.

Nielsen said the town government isn't yet committed to that strategy, but that it seems to make sense.

"It gives us maximum flexibility to adjust to circumstances as they unfold," he said. "Anything else seems to leave unacceptable holes in the program."

Matt Hongoltz-Hetling can be contacted at 861-9287 or at:

mhhetling@centralmaine.com

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