Governor's budget relies on cost shifting

You have to wonder what Maine's municipalities did to irritate Gov. Paul LePage.

He is, after all, a former mayor himself and certainly understands the way local communities depend upon revenue sharing.

Mayors and municipal managers around the state must have been shocked Friday when the governor's staff proposed a two-year suspension of that program under his budget proposal. Not reduction — suspension.

The governor has, of course, proposed millions of dollars worth of other cuts, namely $52 million in social welfare spending, including elimination of the state's drug program for the elderly.

He has proposed flat-funding education, plus he would like schools to pick up $14 million a year in teacher pension payments.

And the governor has proposed cutting 200 state jobs and tweaking the state's tax code on investment income to raise more money, which sounds a little like a tax increase.

But municipalities would suffer the biggest hit, a $400 million, two-year suspension of municipal revenue sharing.

"This budget would be devastating to the city of Lewiston and its residents," Rep. Peggy Rotundo, House chairwoman of the Appropriations Committee, told the Sun Journal.

Lewiston City Administrator Ed Barrett said the proposed cut would put a $4 million hole in the city's $44 million annual budget. Just for comparison's sake, the entire police department budget is $5.5 million.

It is hard to imagine how the two struggling cities, which already have high property taxes, could cut enough to survive the two-year suspension without eliminating important services and raising taxes.

Again, the governor's revenue sharing proposal wouldn't save money, it would simply move the monkey to the backs of Maine's municipalities and property tax payers.

Schools, meanwhile, would fare better with flat funding of General Purpose Aid to Education. They would even receive some additional money to fund some of the governor's educational initiatives, such as teacher assessment programs.

Now it falls to legislators, particularly the majority Democrats, to come up with alternatives to the governor's cuts.

The big question will be whether the Legislature will modify or repeal the state income tax cut the governor pushed through the former Republican-dominated Legislature.

Democrats warned at the time that the tax break was unfunded and that it only modestly benefited low- and middle-income taxpayers.

Trying to repeal that would now be called a tax hike, and Republicans are sure to oppose that.

Yet, the argument will be made that a tax break that nets a family $20 a year will not look like a bargain if their property taxes are going up by $200 or $300 a year.

Barrett warns that trying to make up Lewiston's revenue sharing cut by raising taxes would mean the owner of a $150,000 home paying $300 more per year.

Numbers like could turn many tax break supporters into opponents.

The governor has put his plan on the table. It now falls to the Legislature, particularly Democrats, to come up with a better plan.

Let's hope they do.

rrhoades@sunjournal.com

The opinions expressed in this column reflect the views of the ownership and the editorial board.

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Comments

Amedeo Lauria's picture

What do you propose our Governor do?

Borrow from China? Print more money? Wait, only our administration in Washington D.C. has those options and exercises them regularly. To include raising the debt ceiling at the drop of a hat.

Excellent solution proposed, let's depend on those who put us in this financial mess to come up with a solution, great plan! Can't wait to see how that works for working Mainers!

The only sane way out of this mess is to make Maine a business friendly, and income friendly state and increase our tax base; NOT our tax rates!

Steve  Dosh's picture

Amedeo ? Friday night MLK

Amedeo ? Friday night MLK jr. day weekend
Q: Can you even name the communist Chinese currency ?
A: _______________ ?
Have you ever seen one ?
Neither have we
In God we trust . All others pay ca¢h
Aloha from Pahoa /s, Steve
http://www.pyccmaui.org/php/webcam.php

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