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by Chris Chase
Coastal Journal staff
DAMARISCOTTA — The town of Damariscotta hosted a meeting on Feb. 15 to address the current prospective state budgets, in order to determine how municipalities will need to prepare for changes that may occur due to the currently proposed budget.
The meeting featured a panel that included representatives Michael Devin of House District 51, Bruce MacDonald of House District 61, and Senator Chris Johnson of Senate District 20, and was hosted by Damariscotta Town Manager Matt Lutkus. The meeting was aimed at addressing the increasing fear many municipal governments hold that the proposed bi-annual budget will completely cripple town and city governments and force property taxes to drastically increase.
“We are looking at a $203,000 impact on our income,” said Lutkus on behalf of Damariscotta.
That impact to income is from the proposed slashing of revenue sharing. The current bi-annual budget proposed by Gov. Paul LePage calls for municipal revenue sharing from the state to be completely eliminated in order to bridge the budget gap the state government is currently facing. If that plan comes to fruition, massive amounts of funding municipalities have been depending on will be gone.
“We taxpayers will have to make the difference,” said Pat Hudson, a selectman of Newcastle. “I think the state is taking the wrong attitude to this. We have a lot of people in Newcastle that are just barely making it.”
The assessment, according to many municipal officials as well as Sen. Johnson, is that the loss of revenue sharing can’t simply be taken care of through cuts in services, as municipal governments have historically run as lean as possible.
Superintendent Steve Bailey of Maine AOS #93, the Central Lincoln County school system, is also worried about the future of the school’s budget. According to Bailey, if the budget is passed as is, it will cost the district over half a million dollars.
“Revenue sharing is so far what seems to be the biggest issue across the county in impact. For me that’s a nonstarter. We can’t do that to our towns and to our property taxes,” said Johnson.
The three representatives of the state government all agreed that the elimination of revenue sharing was something that has to be eliminated from the budget.
“The shifting of cost onto the property tax represents the completely wrong direction to go in tax policy. Property tax is probably the most regressive of the three main taxes that you have available. And it inordinately hits people who have the least ability to pay,” said Rep. MacDonald. “In fact, as a number of people have pointed out, that for most middle and lower income people, property, the home, maybe their small business, represent their largest investment in wealth. And here we are taking the only source of wealth for most moderate or lower income people and putting more taxes on it.”
The current plan in the legislature, according to the three representatives present, is to ensure that the budget proposal sent back to LePage has enough support to ensure a two-thirds majority in order to prevent a veto, something LePage has previously stated is a real possibility. The Appropriations Committee has unanimously endorsed a plan for the supplemental budget, but still has a great deal of work to do on the bi-annual budget. According to Johnson, a finalized budget from the committee will take many months considering the services and budget shortfall at stake.
Unfortunately for municipalities and school districts, many of their budgets will need to be finalized well before the state’s budget, leaving them to speculate on what funding they will have available and forcing them to hope for the best.
“It’s going to be quite awhile. Just thinking about how long it has taken them on the supplemental,” said Johnson. “Going through that whole budget and all the testimony on it. All of the policy committees, reviewing their portions of what’s in that budget and reporting out, and all of that has to happen and then the haggling over what solutions and what to cut.”
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