BIDDEFORD — On Thursday, the state senate enacted a bill to restore $40 million to revenue sharing. This money is used to help pay for local services and lessen the burden on property taxpayers.

The enactment was a relief to municipal officials, both locally and across the state.

Many had testified at a public hearing of the Legislature’s Appropriations and Financial Affairs Committee last month saying that if the bill didn’t pass and bring the total revenue sharing fund to $60 million, they would have to raise property taxes and/or cut services like snow plowing or public safety.

Biddeford Fire Chief Joseph Warren said the loss of additional revenue sharing to Biddeford would cause a reduction of firefighters and EMT personnel, which would delay response times to fires and ambulance calls.

“We’re talking about people’s lives here,” he said.

If the city’s revenue sharing were cut, Biddeford Police Chief Roger Beaupre said his department would lose more than $400,000 ”“ reducing staff to pre-1991 levels.

“We’re very pleased,” said Maine Municipal Association spokesman Eric Conrad of

the enactment.

MMA, which advocates for Maine’s cities and towns, made a strong pitch for passage of the bill, including creating a television and social media campaign. The campaign was targeted at property taxpayers in hopes they would put pressure on state legislators to vote for the measure. Conrad said he thinks the campaign educated homeowners and small business owners about how the revenue sharing affects them.

Conrad said he was impressed with the “high level” of discourse between municipal officials and legislators on the issue. He said he was also “heartened” by the support for this Democratic-led bill from Republican lawmakers.

One concern about the bill that had been raised during debates was whether it would affect the state’s credit rating.

It the bill makes it through the final steps, it would be funded using $4 million from a reserve account for tax breaks for the wealthy; $15 million from new revenue; and $21 million from the budget stabilization fund, the so-called rainy day fund.

Department of Administrative and Financial Services Commissioner H. Sawin Millett Jr. has warned the Legislature against removing funds from the budget stabilization fund.

“It is not sound fiscal policy to dip into the State of Maine’s savings account and further diminish our already limited financial reserves,” he said. “Bond rating agencies, such as Moody’s and Standard & Poor’s, have warned of a potential downgrade should we fail to maintain or increase the balance of our budget stabilization fund.”

Nicole Johnson, a senior vice president with Moody’s, said Maine’s credit rating is slighting below average. A relatively low budget stabilization fund, the so-called rainy day fund, is one of the considerations, but not the only one, affecting the state’s rating, she said.

A slow economic recovery, slow revenue growth, continuing budget shortfalls, using a bond to reimburse payments owed to Maine hospitals, and other factors are also reviewed when calculating the state’s credit rating, said Johnson.

Because Maine has nearly depleted its “rainy day fund,” said Ken Rodgers, public finance director at Standard & Poor’s, “That fact coupled with the state’s having recovered slowly from the past recession and having run several years of general fund deficits might suggest that whatever action a state may contemplate if it were to further weaken a recovery of the state’s finances could have adverse credit implications.”

In addition to concerns regarding the credit rating, state Rep. and Biddeford Mayor Alan Casavant, who voted in favor of the measure, said by increasing funding for revenue sharing, there will have to be cuts somewhere else.

“It’s like a pie. When one piece gets bigger,” he said, “somebody else’s piece gets smaller.”

Now, it’s Gov. Paul LePage’s move.

In order for the bill to become law, the governor must either sign the bill or do nothing within the next 10 days, and then the bill becomes law without his signature.

If he vetoes the bill, the Legislature can override that veto with a two-thirds majority vote in both the House and Senate.

Because of the overwhelming support in both chambers of the Legislature, Conrad said he is “cautiously optimistic” that there would be enough votes to override a veto by the governor.

Even if the bill becomes law, he said, the MMA would continue to lobby for the bill until the legislative session ends. Until then, said Conrad, “anything can happen.”

In addition, he said, while having a state revenue sharing fund of $60 million “feels like a victory, (the fund) should be $138 million,” according to the state statute passed in 1972.

The MMA will continue to advocate to bring revenue sharing to full funding, he said.

— Staff Writer Dina Mendros can be contacted at 282-1535, ext. 324 or [email protected]



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