FARMINGTON — Selectmen discussed Tuesday some potential effects on the town from cuts proposed in the governor’s budget.
They suggested residents contact their local state legislators to voice their concerns as communities throughout Maine face the potential of rising municipal property taxes and a loss of revenue from the state.
The Maine Municipal Association is gathering information from communities, including Farmington, in response to the release of Gov. Paul LePage’s proposed budget earlier this month, Town Manager Richard Davis told the board.
One of the largest items to affect the town is municipal revenue sharing, which the governor proposes to suspend for two years starting this summer. If the proposal passes, the money would be applied to fund state government.
The town has received $720,000 per year from revenue sharing to help with local property taxes. It’s the biggest source of non-property tax revenue for the town to use to reduce taxes, Davis said.
MMA figured the amount for Farmington should be $840,000, which means the state has never fulfilled the 5.1 percent promised as the town’s share of sales tax, he said.
“We’re already behind the eight ball,” Davis said.
Another area of concern is the loss of the Homestead Exemption program. More than 1,500 local properties receive the exemptions, which subtracts $10,000 from a property’s assessed value, assessor Mark Caldwell said.
He anticipates a $200-plus average increase in property taxes for the properties that currently receive the Homestead Exemption.
According to information supplied to the board by MMA, the governor proposes a $20,000 Homestead Exemption but it would only apply to “homesteaders” 65 years of age or older.
Education funding, General Assistance reimbursements to towns and some business programs are also slated for restructuring.
The governor is also looking to take a portion of the town’s motor vehicle excise tax revenue to support state road and bridge programs. Funds collected for trucks that haul trailers would be collected by the local municipality and turned over to the state.
The changes pose a potential double concern for local municipalities with property tax increases for residents and loss of state revenues to help keep them down, according to MMA.
Hearings on the governor’s proposed budget are several weeks away, giving MMA time to collect data to show the impact to towns.