Municipal leaders oppose Governor’s proposals
By Kathy McCarty
Staff Writer
Municipal officials from across the state have expressed opposition to Gov. Paul LePage’s proposed cuts to local governments, including the elimination of municipal revenue sharing and the BETR/BETE conversion — Business Equipment Tax Reimbursement Program and Business Equipment Tax Exemption Program.
Among those speaking out is Easton Town Manager Jim Gardner, who attended a public hearing March 25 in Brewer where he expressed his views on the proposed changes.
“The Governor’s staunch response of ‘It’s not me, it’s municipalities raising taxes’ just doesn’t make sense. He’s coming around the backside of this to compensate for the state’s shortfall,” said Gardner. “The poor get poorer while the rich get richer.”
Gardner said the Governor’s plan to take away the Homestead Exemption is one that will affect every community in the state.
“He’s taking away the Homestead Exemption and there’s nothing we can do about it. The state agreement’s been around for years and he wants to take it away,” said the town manager. “He’s also planning to cut the Circuit Breaker program.”
The BETR/BETE conversion is another concern of Gardner’s.
“It will affect Easton big time. We’ll lose about $340,000. We could see a tax increase in Easton if the Governor’s proposals go through,” said Gardner.
Under LePage’s plan, taxable property would be converted to completely tax-exempt status. In exchange for the tax exemption on businesses, the state would discontinue the reimbursement program for 18 months. This could cause problems for both businesses and municipalities, based on such things as the property’s location and especially if it’s located in a TIF (tax increment financing) district.
Gardner had the opportunity to share his concerns with members of the state’s Joint Standing Committee on Appropriations and Financial Affairs at the Brewer gathering, which attracted over 200 representatives from towns and cities across the state.
“The Board of Selectmen in Easton were “opposed to all aspects of the Governor’s budget, in particular the BETR/BETE conversion,” he said.
“Easton has an assessed value of $223 million, of which $170 million is personal property. The impact of the conversion is $338,453 or 1.5 mil. We are very fortunate in Easton to have two large industries whom have grown under the BETR/BETE program,” Gardner told the committee.
“With all of the Governor’s shift of taxes, it will cost the Easton taxpayer 4.3 mil, not to mention $90 each year under the elimination of the Homestead Exemption. This 4.3-mil rate increase will raise taxes 33 percent to all taxpayers in Easton, so now tell me would you look to expand,” if you were a business located in Easton, continued Gardner.
Gardner said the recent expiration of a TIF for one local business had an impact on local taxes and that more changes would be devastating — particularly to the local education system.
“The Governor’s GPA proposal will add to the already $500,000 lost because of expansion/TIF to which Easton says ‘We already pay 90 percent of a $2,543,000 budget for education,’” said Gardner. Easton receives about $223,000 for education from the state but Gardner said under LePage’s proposal, another $100,000 would be cut, resulting in Easton receiving just $112,000 for education.
“We’re $100,000 away from being a charter school,” said Gardner.
“I believe the Governor should look somewhere other than to municipalities to create his budget and understand that before he puts a strain on taxpayers, he should clean up his own house,” Gardner told the committee.
Presque Isle City Manager Jim Bennett also attended a similar hearing downstate, held on March 13, and he too expressed concerns over how the proposed changes would impact not only Presque Isle but all Maine municipalities. He noted that municipalities have only property tax to support their service delivery system, while the state has a variety of tools to achieve funding goals.
“I’ve learned a little about common sense since I’ve been up in The County for four years and I’m not aware of any farmer who would be faced with the challenge of having a budget reduction, where they would say ‘We’re going to cut the fuel to put into our harvesting equipment and hand-pick our product.’ In a lot of ways, that’s what it feels like, because you’re passing (your budget problems) along to the communities, who have the least amount of tools to address the issue,” read Bennett’s statement from the meeting, posted on the Maine Municipal Association’s website.
In giving his manager’s report to City Council during their April 1 meeting, Bennett advised councilors they will need to start thinking of ways to further cut the city’s budget, to compensate for the shortfall, should the Governor’s proposals be approved.
“It appears to me that we’re going to have to make adjustments to the budget. We won’t see revenue sharing go back up to the full amount; we won’t find out the state’s budget until June. I’d like to begin a dialogue, during a Council workshop session. Our goal is to find $200,000 to $300,00 in reductions,” said Bennett, noting that figure would “help keep the tax rate flat.”
“This has nothing to do with SAD 1. They’ll be going to voters the first week of June looking for a tax increase,” said Bennett. Council set a budget workshop date of Monday, April 29, at 5 p.m. at City Hall.
Gardner was joined at the Brewer meeting by Houlton City Manager Gene Conlogue and Mars Hill’s interim Town Manager Ray Mersereau — both of whom opposed the Governor’s proposals.
“Not one person came up to support the Governor’s budget at that meeting,” said Gardner.
“In my 14 years as a town manager, I’ve fought Palesky (tax cap) and TABOR, but I never thought I’d have to fight my own governor,” said Gardner. “LePage’s budget propositions are almost identical to Palesky/TABOR. He’s grinding that axe and that’s too bad.”
Gardner said all of the governor’s proposals are “riding on the backs of the taxpayers.”
“The Governor says we’re ‘open for business,’ but he’s shutting us down,” he said.
Gardner had some suggestions for state officials that would help solve the budget issues.
“My first suggestion to the Governor would be to suspend the tax break he gave to the wealthy. That’s $300 million back. My second suggestion is to put a penny back in the sales tax. That would be put the burden on those who can afford it the most — those who spend the most. And it wouldn’t just be residents paying, it would be tourists. And with a 1-cent tax increase, it’s a choice. Homeowners don’t have a choice, if their property taxes go up,” said Gardner.
Gardner said for years he’s been involved in discussions about “two Maines,” but now it’s a matter of communities against the state.
“He’s nailing everybody — all but the 1 percent,” said Gardner. “Our goal — we need to make sure everyone knows the truth; come see our numbers.”
