AUGUSTA – Significant declines last year in revenue essential to town and city governments may soon cause residents to make some tough choices about raising taxes or cutting public services, according to the author of a Maine Municipal Association report.

Kate Dufour, a legislative advocate for the association, wrote the report that looked at revenues and spending by towns and cities in 2010. She evaluated data gathered in a survey that is sent annually to municipalities.

The survey shows drastic and in some cases unprecedented drops in everything from local service fees collected to state and federal tax dollars shared with municipalities, Dufour said. The survey compares data with the same categories for 2009.

Town and city governments statewide saw an overall 6 percent decline in operating revenue from all sources, forcing municipalities to ask residents how they wanted to fill the budget gap, she said.

“At the end of the day, it’s up to voters and the residents of the community to decide what is best for their communities,” Dufour said. “Sometimes it’s an increase in taxes or a cut in services.”

Local government spending on public safety and road maintenance each increased by 6 percent, while the money spent on most other public services and programs decreased, the survey found.

Although the survey doesn’t provide data on specific budget cuts in each community, Dufour believes many municipalities tapped into reserve accounts, reduced employee benefits and shed workers to stave off drastic cuts in public services last year.

Declines in spending on government administration, however, show that municipalities may be running out of places to cut very soon if the downward trend in revenue continues, she said.

There was a nearly 7 percent drop in spending on general administration — which consists of employee benefits, administrative offices, legal, economic development and government building maintenance.

Dufour characterized this decline in administrative spending as a drastic drop when compared with much smaller decreases in the category during the 16 years that she has written the report, which is released in November each year.

“This could be a preview of coming attractions, and over the next few survey cycles we’re going to get a sense of what challenges may be in store for municipalities,” she said.

Many towns and cities statewide have also consolidated services and departments to reduce spending, something that highlights how local government is stretching revenues to keep offering public services, Dufour said.

“I think municipalities are going to continue to find ways to provide these services,” she said.

Kennebec Journal Staff Writer David Robinson can be reached at 861-9287 or at:

drobinson@centralmaine.com

 

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