The Democrat-dominated Legislature recently enacted L.D. 1, “An Act to Increase the State Share of Education Costs, Reduce Property Taxes and Reduce Government Spending at All Levels.” I do not believe it will serve my city of Auburn, nor the state of Maine, well.
“Motion does not equal progress” has been a descriptive term for it.
Most of the act revolved around a school-funding scheme called “Essential Programs and Services,” a method of selecting what parts of local education costs that the state should fund. EPS has not been fully developed yet, so the funds to be awarded remain tentative. The people’s referendum vote was for the state to pay 55 percent of education costs, but L.D. 1 delays that for four years. The payments for 2005-06 and 2006-07 are only a fraction of the 55 percent voters demanded. The last figures available estimate additional funds for Auburn education of approximately $550,000 in 2005-06 and approximately $650,000 in 2006-07.
Sounds good, but wait.
L.D. 1 raised the annual homestead property tax exemption from $7,000 to $13,000, but the state will only reimburse the community for $6,500 of that lost property tax revenue. Auburn has a current tax rate of $29.38 per thousand evaluation and there are 5,080 homesteads in Auburn. The city, therefore, will need to make up over $900,000 of lost tax revenue ($190 per homestead) each year if this tax rate remains. This means businesses, out-of-town property owners, renters, empty land owners and second-home owners will have a higher property tax since they are not homesteads.
A weak part of the act places caps on spending by cities, towns and counties. However, all of these caps can be overridden by a simple majority vote of the body that proposes the budget in the first place. I question whether or not the people want the state government to put spending caps on our local government.
This is another “smoke-and-mirrors” performance by the current administration. The non-homestead property owners and renters will take a hit because of the tax shift to them. The additional funds for education do not equal the uncollectible funds from property taxes, therefore Auburn takes a hit. Where the state is going to find the additional education funds remains to be seen, in view of the expansion of an expensive and generous Medicaid program.
Rep. Thomas F. Shields lives in Auburn.
Send questions/comments to the editors.
Success. Please wait for the page to reload. If the page does not reload within 5 seconds, please refresh the page.
Enter your email and password to access comments.
Hi, to comment on stories you must . This profile is in addition to your subscription and website login.
Already have a commenting profile? .
Invalid username/password.
Please check your email to confirm and complete your registration.
Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.
Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.