April 13, 2013

City officials back bills to save state aid

Gov. Paul LePage wants to suspend revenue-sharing, which would force cities and towns to increase local taxes, critics say.

By Michael Shepherd mshepherd@mainetoday.com
State House Bureau

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Sen. Roger Katz, R-Augusta, left, and Sen. Justin Alfond, D-Portland, have submitted bills to keep revenue sharing coming to cities and towns.

Towns that lose revenue sharing and don't cut services have few alternatives for raising money other than to increase property taxes.

According to the Tax Foundation, property tax revenue accounted for 40.6 percent of total state and local tax revenues collected in Maine in 2010, compared with 36.4 percent in 2008.

Waterville Mayor Karen Heck said suspending revenue sharing "would inevitably lead to significant property tax increases statewide."

But legislative Republicans don't necessarily agree. Katz said he particularly applauded LePage for broaching the topic of municipal consolidation as an alternative to revenue sharing. Many cities and towns said they have actively pursued service-sharing agreements.

"I'm a little bit uncomfortable that the suggestion that's come out from a number of different avenues (is) somehow consolidation will help us cut our way to fairness," said Rep. Michael Carey, D-Lewiston.

"It's not a huge solution, but it's raised the issue in conversation and I hope we continue that," Katz said.

Katz is a co-sponsor of Alfond's proposal. The bill would also establish a board of trustees to manage it, putting strong restrictions on the use of funds.

"We made a promise," Alfond said in testimony. "And now it's time to not only uphold our end of the bargain, but to permanently protect revenue sharing."

Herman, the Maine Municipal Association lobbyist, said the bill would provide cities and towns with needed budgetary stability.

"The advantage from the municipal side is predictability," he said.

Michael Shepherd can be contacted at:


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