2013-02-15 / Community News

Impact of state budget cuts assessed

Town officials, representatives react to governor’s proposal
By Jack Flagler Staff Writer

SOUTH PORTLAND — It would be an understatement to say Gov. Paul LePage’s proposed biennial budget issued in January did not go over well in South Portland and Cape Elizabeth.

At a council meeting Monday, Feb. 4, South Portland Mayor Tom Blake said he “has never seen anything this potentially dangerous to our community in 40 years of following South Portland government.”

Maine District 7 Sen. Rebecca Millett described the proposal as “draconian measures” from the governor at a public forum in Cape Elizabeth on Feb. 6.

LePage’s proposal is not final. Rather, it describes the governor’s vision as the Maine Legislature prepares to begin work on its biennial budget, likely at the end of February.

After legislators finish the supplemental budget to balance the books and close the budget gap this year, the House will move on to the biennial budget for 2014 and 2015, which Millett called a “much bigger task.”

Millett is a first-term senator and Democrat representing South Portland, Cape Elizabeth and part of Scarborough in Augusta.

She held public forums to inform local officials and residents about the biennial budget process in South Portland and Cape Elizabeth the week of Feb. 4.

She was scheduled to hold a similar forum with Sen. Jim Boyle at the Scarborough Public Library on Wednesday, Feb. 13.

The biennial budget process will begin with the Joint Standing Committee on Appropriations and Financial Affairs holding public forums, then taking their recommendations to the House and coming to a compromise between majority Democrats and minority Republicans.

Local officials are primarily concerned with LePage’s proposal to transfer $425 million that was once the state’s responsibility onto municipal budgets.

That will mostly come from the elimination of the state’s $283 million municipal-revenue sharing program. The suspension of that program means South Portland property taxpayers will lose $1.8 million in revenue sharing funds, part of a $2.8 million overall reduction, while Cape Elizabeth takes a $640,000 hit without revenue sharing.

In addition, LePage’s proposal will draw a line at age 65 for those who take advantage of two property tax relief programs, the Homestead Exemption and the “Circuit Breaker” benefit.

The programs will disappear for those under that age limit, while the benefits will increase for property owners older than 65.

Cape Elizabeth Town Manager Mike McGovern estimated the property tax impact would be $608 on a resident who owns a home at the median town value of $314,000. South Portland Finance Director Greg L’Heureux estimated a South Portland homeowner with a median property value of $195,000 would see a $326 tax increase.

“The governor’s proposal delivers a double whammy to all property taxpayers in this state by first jacking up the property tax rate in a variety of ways and then eviscerating the programs that are designed to help people who are having trouble paying their property taxes,” wrote Geoff Herman of the Maine Municipal Association.

The South Portland City Council agreed. It passed a unanimous resolve by a 6-0 vote to oppose LePage’s proposed budget. City Manager Jim Gailey said other municipalities, including Lewiston, have passed similar resolves.

“The worst case scenario, if it was played out, some of our citizens would be astounded at how it affects our community. We would be laying off multiple dozens of people. We’d be eliminating services and programs, no question about it,” Blake said.

State legislators have a limited ability to move in a different direction than the one LePage has suggested. If the House and Senate both vote to support an alternative budget, they need to do so with bipartisan support, said Senate President Justin Alfond of Portland at the Cape Elizabeth public forum. Otherwise, if Democrats push through measures Republicans are opposed to, Alfond said, LePage would likely veto the budget “as quickly as it got on his desk.”

The fact that LePage’s proposal isn’t finalized is likely welcome news to many municipal governments, but Alfond cautioned the timeline of the state’s budgeting process will not benefit cities and towns around Maine. In early March, when municipalities begin their own budget process and start holding public forums, the state will not have hard numbers to provide to cities and towns.

“That’s going to put every municipality in a very, very tenuous position,” Alfond said.

Rep. Heather Sirocki (R-Scarborough) likened the budget process in Augusta to “making sausage,” but noted in past years the Legislature has agreed on a budget by a twothirds majority, more than its federal counterparts in Washington can say.

This time around, Sirocki wants to make sure the income tax relief passed in 2011 that took effect this year is not repealed, which some Maine Democrats have suggested. She said the income tax reforms benefit Maine individuals and families across all income levels, and are necessary to ensure Maine can “benefit from a secure and healthy economy.”

Alfond disagreed with Sirocki about the scope of the cuts. Sirocki called the tax relief “modest,” but Alfond suggested the program worsens a “major revenue problem.”

Rep. Amy Volk, (R-Scarborough) agreed with Sirocki’s focus to keep income tax reform. Volk said she regrets municipalities don’t have more time to adjust to the sweeping changes from the proposed budget. Volk said she doesn’t necessarily agree with every detail in LePage’s proposal, but she noted that his proposals are not final at this point, and agreed with his priority to keep the income tax relief in place.

“I don’t believe (LePage) has drawn a line in the sand other than income tax,” Volk said. “I would also draw that line in the sand.”

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