The central job of those charged with community and economic development across Maine’s 490 municipalities is balancing the needs of citizens with the volume of taxable property. Several relationships illustrate this implacable reality. The more people in a town or city, the greater the volume of public spending. The correlation between a municipality’s spending (dollars committed) and the size of its population is 95 percent. The correlation between a municipality’s spending and the level of state valuation is 96 percent.

But – and here is the crux of the challenge facing town officials across the state – this “more people, more property leads to more spending” relationship is far from smooth over the state’s 490 municipal units. For Maine’s seven municipalities with populations above 20,000 people, the average population is 32,000, the average state valuation is $3.3 billion, the average annual municipal spending commitment is $64 million and the average full-value tax rate is $20.16.

For Maine’s 128 municipalities with populations under 500, the average population is 218, the average state valuation is $49 million, the average annual municipal spending commitment is just over $500,000, and the average full-value tax rate is $12.49.

Over the full range of towns, the relationship is clear – the larger the population, the higher the tax rate. However, when considered on a spending-per-person basis, a different conclusion emerges.

For the largest seven municipalities, the average spending per person is just over $1,900. For the smallest 128, it is over $2,300 per person. The per-person cost of municipal services is actually least ($1,600 per person) for the 141 towns with populations between 2,000 and 9,000.

Who, therefore, “needs” more “tax relief?” The smallest towns with the highest cost for public service on a per-person basis? Or the largest towns? Should it be our public policy to equalize access to public resources across all geographies? Or, alternatively, should towns simply set the service levels they decide by public vote and let people choose where to live?

It is interesting to see in this regard that the correlation between full-value tax rate and level of population is only 23 percent, and the correlation between full-value tax rate and level of state valuation is only 19 percent.

In a word, neither more people alone nor more taxable property alone does a very good job of explaining local property-tax rates. Yet, the correlation between the ratio of spending per person to state valuation per person and full-value tax rate is 99 percent.

In short, Maine’s cities and towns spend what they can afford to spend. And what they can afford comes down to the annual juggling of citizen needs with the growth (or decline) in taxable property.

The overall point of this perhaps belabored consideration of the obvious is that Maine’s cities and towns need help in setting their individual situations into some broader context. To say that all 490 municipalities should be treated equally is legally true but operationally unhelpful.

Over the past decade, hundreds of towns spent thousands of hours struggling with the assertion that their organization for providing education was top-heavy and needed reform. Many spent considerable sums struggling to set up consolidated school districts.

No sooner had these monumental efforts to restructure the delivery system of the state’s largest local public service than the penalty for leaving such newly created districts was removed and scores of towns rushed for the exits, seeking to leave the units they had just joined.

Whatever the reasons for joining or leaving such consolidated units may have been, the harvest has been enormous wastes of time and money and little if any improvement in the quality of education provided.

In a world of aging population, generally declining school enrollment, booming housing markets targeting vastly different types of households, and vast economic opportunity based on the ability to attract talented workers, the need for attention to community development in Maine has never been greater. And neither has the need to base that development on a fresh look at the changing demographic, economic and social structure of our 490 municipal units.

Charles Lawton, Ph.D., is a consulting economist. He can be contacted at:

cttlaw3@gmail.com

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