Bill aimed at keeping property taxes down heads to Governor’s desk

AUGUSTA—The Senate enacted a Democratic-led measure to restore $40 million in funding to Maine’s towns and cities to ensure towns can continue providing essential services and keep property taxes down.

“Today many lawmakers sent a message back home: we will keep our promises. Passing this measure and keeping our promise is the responsible thing to do for our community and the property taxpayers of Maine,” said Senate President Justin Alfond of Portland.

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.

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.

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.

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.

“It is a priority for us in the Legislature to keep our word to towns across Maine so that property taxes on homeowners and businesses don’t rise and essential services like police and fire departments and schools are not cut,” said Senator Dawn Hill, the Senate Chair of the Appropriations Committee and co-sponsor of the bill.

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 measure LD 1762, passed in the Senate earlier this week with a vote of 33—2 and the House passed it 114-21 last week.