Our view: Raids of Maine's Revenue Sharing Fund must be stopped

Look at the chart above.

Really, really look at it.

It shows the amount Maine municipalities get from the state every year from taxes generated from Maine's economy. What's missing: the amount the state has decided to keep in recent years to pay its own bills.

Every month, the state controller is legally required to transfer 5 percent of all individual and corporate income taxes, franchise taxes, service provider taxes, and sales and use taxes from the General Fund into the Local Government Fund. Those deposits are intended to be distributed to Maine’s cities, towns and territories as part of the state’s municipal revenue sharing program.

In 1992, for the first time, state government took $30 million out of that 5 percent that's supposed to go to municipalities. Lawmakers did it in order to meet state expenses in what appeared to be a one-time raid.

That exception was not to be.

While in office, Gov. John Baldacci made it standard practice to raid the fund, taking money in fiscal years 2004, 2005, 2007 and 2010, calling each withdrawal a "one-time transfer." Raiding has since continued, including the last and largest transfer of $44.3 million in fiscal year 2013.

That money was and is statutorily reserved for municipalities.

On Monday, the Office of the State Treasurer released the projected revenue sharing funds that towns throughout Maine can expect to receive in the coming year, FY 15. We charted those projected funds for the towns where the Sun Journal has bureau offices, and also for Augusta, Bangor and Portland, and each will receive less than in FY 14.

The amount of revenue sharing each municipality receives is based on a mildly complex formula of population and local property tax burden.

The state controller doesn’t calculate the revenue sharing dollars per resident in each town, as we did in our chart. We thought the per-capita figures would be helpful.

As you can see, with the exception of FY 10, Rumford has received a higher per capita amount under revenue sharing than other bigger cities in Maine, including Portland. And, with the exception of FY 12, Norway has consistently been a low receiver.

What you will also see from these numbers is that in FY 15, Maine’s towns are expected to get a fraction of what they have been getting in past years, largely because the fund doesn't contain the money it's supposed to.

Auburn will receive just 42 percent of the funds it got in FY 10. Lewiston will fare better, getting 57 percent of the funds it received in FY 10; Rumford and Farmington will fare just slightly better than that.

Portland is expected to receive about half of the funds it got in FY 10, and both Augusta and Bangor will get less than half.

That's a sad retreat over the years, particularly during a time when municipal expenses have climbed.

The amounts are well under what these towns should rightly be getting based on the original revenue sharing statute, and the damage this year could have been far worse if the Legislature had not voted last month to restore $40 million in revenue sharing money that Gov. Paul LePage eliminated from the current two-year budget. That money amounted to two-thirds of all projected distributions for FY 15 and its loss would have been devastating for towns.

Maine’s revenue sharing statute passed into law in 1971 and was tweaked several times over the next two decades to augment aid to towns. Then, in 1991, the Legislature started using the Local Government Fund as a piggy bank, taking money out for General Fund purposes and replacing that money from other accounts, including moving money over from the Highway Fund in 2003 to restore revenue sharing.

Over the past decade, the raids really ramped up and the money was not always restored. Towns have suffered.

That has to stop.

Just because state government has trouble paying its bills doesn’t mean it should withdraw money from a fund that is statutorily designated to help towns.

The Legislature restored the Local Government Fund this year, but that doesn’t mean it will remain safe nor should it mean that lawmakers should call this a job well done and move along.

We are now in an election cycle for the 127th Legislature and every person who qualifies for the November ballot must give thought to stabilizing the Local Government Fund and giving Maine’s towns some protection from future raids.

Make it a priority.

jmeyer@sunjournal.com

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

What do you think of this story?

Login to post comments

In order to make comments, you must create a subscription.

In order to comment on SunJournal.com, you must hold a valid subscription allowing access to this website. You must use your real name and include the town in which you live in your SunJournal.com profile. To subscribe or link your existing subscription click here.

Login or create an account here.

Our policy prohibits comments that are:

  • Defamatory, abusive, obscene, racist, or otherwise hateful
  • Excessively foul and/or vulgar
  • Inappropriately sexual
  • Baseless personal attacks or otherwise threatening
  • Contain illegal material, or material that infringes on the rights of others
  • Commercial postings attempting to sell a product/item
If you violate this policy, your comment will be removed and your account may be banned from posting comments.

Advertisement

Comments

Seriously?

What grade are you imbeciles in? This childish exchange encapsulates perfectly why I rarely post to the forums any more, and why few others do. And I'm looking at *everyone*, not just Gravel and the Pirate.

MARK GRAVEL's picture

I hope you also see a

I hope you also see a reflection of yourself in that window. You have donated your fair share of personal criticism, especially to me anyway.

Instead of storming off, just pick yourself up and try to improve - that goes for all of us - and stick with it.

I have. Why do you think I

I have. Why do you think I stopped?

MARK GRAVEL's picture

Good for you.

Good for you.

MARK GRAVEL's picture

I actually think revenue

I actually think revenue sharing must stop. Let the town increase property taxes to raise revenue it needs, then everyone will have skin in the game. Call it pay to play.

 's picture

Reduce the state income tax ...

... by those totals - heck, reduce it to zero. Let the people who earn the money keep it - for a while. When the town puts its hand out, palm up, and says "gimme", the people will finally learn what all this "sharing" is really costing, and some real reform will happen pretty quick.

MARK GRAVEL's picture

There is no more effective

There is no more effective way to control spending than to make everyone pay for the services they think are necessary. You are spot on by saying that is when real reforms will happen.

 's picture

Imagine what would happen ...

... should Congress pass a bill making withholding illegal. Make everyone write checks every month or so to the IRS and MRS for his estimated income tax liability. It would not cost John Q. Taxpayer one more dime, except for stamps, but it would make him know for sure exactly how much is being stolen from him.

The time to change from the current tax code to something rational could be clocked with an egg timer.

PAUL ST JEAN's picture

It's been going on too long.

It's been going on too long. It can't be stopped now; it'd be absolute chaos. Easier to reduce the amount of money that goes to the state in the first place wouldn't it?

MARK GRAVEL's picture

Paul, I could not agree with

Paul,

I could not agree with you more, and I actively pull that trigger 24/7. I'm very active in finding cracks in the tax code that allow me to minimize the homage I have to pay to the god farther - oh, I mean the government.

PAUL ST JEAN's picture

That's why the loopholes are

That's why the loopholes are there, for those who are smart enough to decode their intent. As long as they remain legal; no harm no foul.

MARK GRAVEL's picture

Spot on again. It is really

Spot on again. It is really not that hard. The IRS provides clear examples. You just have to commit some time to reading all the publications. I play by the rules, but I make it a point to first understand the rules.

PAUL ST JEAN's picture

"He who knows the rules, gets

"He who knows the rules, gets to drink beer with the refs after the game", sez the all-knowing parrot.

MARK GRAVEL's picture

A good part of success is

A good part of success is knowing who to network with. Who has knowledge that can help you advance your goals. That makes me wonder why I waste my time posting here. It must be for the good friendship of Paul and the parrot ;-)

PAUL ST JEAN's picture

I know exactly what you mean,

I know exactly what you mean, but we are humbled by your kind words, nevertheless.

AL PELLETIER's picture

OMG

I'm going to puke!

PAUL ST JEAN's picture

Take a deep breath, assume

Take a deep breath, assume the position, and grab your ankles. 0O:-)

MARK GRAVEL's picture

.... then spell "run" quickly

.... then spell "run" quickly three times.

PAUL ST JEAN's picture

Pretty hard to do when your

Pretty hard to do when your ingredients are being jet-streamed through your nostrils.

MARK GRAVEL's picture

ARRR u n, ARRR..u..n Three

ARRR u n, ARRR..u..n

Three times fast sounds like ARE YOU IN, ARE YOU IN....

PAUL ST JEAN's picture

Haha. That lends itself to

Haha. That lends itself to several interpretations.

AL PELLETIER's picture

Speaking of "anal appendages"

Nobody cares what you actually think.

MARK GRAVEL's picture

Apparently you cared enough

Apparently you cared enough to respond.

PAUL ST JEAN's picture

Why the attitude, Al. No one

Why the attitude, Al. No one attacked you. Isn't this a public forum open to those of differing opinions? Why is an attack necessary?

AL PELLETIER's picture

Honestly, Paul

This guy (perhaps a girl), who knows--- doesn't use it's right name, claims to live in Nevada or California, has no business sticking it's nose in Maine politics and starts my morning with a stupid "anal appendage" comment. Besides, I haven't had my second cup of coffee! Give the parrot my regards.

MARK GRAVEL's picture

I am a Mainer. I happen to be

I am a Mainer. I happen to be working out of state for the past few decades. I make Maine my business.

PAUL ST JEAN's picture

The name/identity thing could

The name/identity thing could apply to just about any of us. Out of staters "sticking their noses in Maine politics", as you know, is not limited to Mr. Gravel.
This is one good reason why the AGREE and DISAGREE options were so relevant. If you agreed or disagreed with a post you could click the appropriate option and move on. Now, you disagree with certain individuals and it's a pissing match of biblical proportion with personal attacks, insults, and name calling, all in the name of free speech. It's clear what the people think of this by the drastic reduction in participants.
The parrot sez "Hey" back at ya.

MARK GRAVEL's picture

Thanks for the backup.

Thanks for the backup. Obviously my opinion differs from those on the far left. I'm not here to stroke any egos'. I see the personal attacks as feedback that my political messages are spot on. My opinions threaten the established believes of the left. Their rebuttal can only be personal because they have no cogent argument to offer.

Take care.

PAUL ST JEAN's picture

Your grasp of the situation

Your grasp of the situation is precise.
Stay well.

AL PELLETIER's picture

Just had my 2nd cup of coffee

And your "anal appendage" comment is still stupid, as is all the above.

MARK GRAVEL's picture

Your tantrums just reflect

Your tantrums just reflect badly on you. You need to reconcile with my presence and my name. I will not be bullied. I will comment here as long as "I" see necessary.

Save yourself some frustration and blood pressure medication, adult up, and deal with it.

PAUL ST JEAN's picture

Nice editorial, but too

Nice editorial, but too little too late. Where were you when Baldacci was doing it left and right? Like everything else, right and wrong are only so depending on who is doing it.

MARK GRAVEL's picture

Because most media are

Because most media are Democrat anal appendages.

Advertisement

Stay informed — Get the news delivered for free in your inbox.

I'm interested in ...