Bill restores $40 million to towns to keep property taxes down

AUGUSTA—In a vote of 33-2, Senate Democrats led the charge to approve a measure restoring $40 million in funding to Maine’s towns and cities to ensure towns can continue providing essential services and keep property taxes down.

“Towns across our state have financially stretched budgets. They came to us with a problem that needed to be solved. Towns across our state, regardless of political affiliation, wholeheartedly support this measure because they know the state should and must keep its promise,” said Senate President Justin Alfond. “In this business, you have to stand up and be accountable to the property taxpayers of your town. Passing this measure and keeping our promise is the responsible thing to do.”

Town officials have been outspoken about the harm to communities and strain on local budgets if this measure isn’t passed by the Legislature. Maine towns stand to lose an average of nearly 62 percent* of state funding for their local budgets if revenue sharing is not restored.

“Last year we all worked across the aisle to make a promise to our towns; we pledged our best effort. We made a promise to towns to ensure good schools, police to ensure safety, and skilled firefighters. Now is not the time to upend all of that work,” said Senator Dawn Hill, the Senate Chair of the Appropriations Committee and co-sponsor of the bill. “Restoring these funds will ensure our towns don’t have to raise property taxes or further reduce essential services like public safety or education, or do both.”

More than half of Maine towns have either just begun their fiscal year or will do so while the Legislature is in session; other towns are facing a June deadline. The towns of Scarborough and Pittsfield have both adopted resolutions in support of the measure.

“There’s been an outpouring of positive response from the people in my district. People back home call us ‘Augusta.’ They don’t differentiate between Democrats and Republicans, or the House and the Senate. They depend on us to do right for their towns, no matter our party or where we serve,” said Senator Jim Boyle of Gorham, who also represents part of Westbrook and part of Scarborough.

Governor LePage has crusaded against revenue sharing. Last year, he proposed to eliminate revenue sharing in his budget. In December, Governor LePage doubled down on his threat to eliminate revenue sharing to towns and went so far as to call revenue sharing “welfare.” And earlier this month, Governor LePage issued a new threat to hold back bond investments if the Legislature passed the measure. He’s also made it well known to lawmakers and the press that he will veto the measure, if passed.

“Once again, Governor LePage is threatening to hold Maine’s economy hostage if he doesn’t get his way,” said Senate Majority Leader Troy Jackson of Allagash. “Today, the Senate sent a message that we will not be held hostage. We will stand up for our towns and cities and keep our funding promise.”

According to state law, revenue sharing is funded by the state’s collection of sales and income taxes and must be used to offset local property taxes. For the past several years, revenue sharing to towns has steadily decreased, even though state revenues have increased. This year alone, funding dropped from $98 million to $65 million, even lower than the state’s share in 1994.

The measure passed by the Legislature funds revenue sharing by tapping $21 million from dollars reserved for critical purposes, $4 million by drawing down dollars from a GOP-initiated account reserved for tax breaks for the wealthy, and $15 million from new revenue, meaning revenue that was above December’s reprojection and is unappropriated.

Despite the false claims made by some Republicans, two representatives from Moody’s and S&P have said utilizing monies from the budget stabilization fund would not lower the state’s credit rating.

The House initially approved the bill, LD 1762, last week in a 114-21 vote and passed it again under the hammer earlier today. The measure will now be sent back to the House for further votes.