AUGUSTA, Maine — In the first of what will likely be many long discussions, top State House leaders met Thursday with representatives from Maine’s nearly 500 cities and towns.
Members of the Maine Municipal Association’s executive committee, made up of town and city officials from across the state, told lawmakers they want to be a part of any solution the Legislature comes up with as it works to craft the state’s next two-year budget.
The group was meeting informally with the Legislative Council, a panel that includes the Legislature’s majority and minority leaders, as well as the speaker of the House and the Senate president.
Before lawmakers is a budget proposal by Republican Gov. Paul LePage that could dramatically change the state’s financial relationship with cities and towns by eliminating about $60 million in state funds that traditionally were passed on to municipalities in the form of revenue-sharing.
In his proposal, LePage replaced revenue-sharing with a proposed law change that would allow cities and towns to apply their property tax at a 50 percent rate to nonprofits that hold more than $500,000 in property value. LePage has said smaller towns could make up for lost revenue-sharing by consolidating services with nearby communities.
But many towns, including Chapman in Aroostook County, have no nonprofits to tax, said Patricia Sutherland, a selectwoman in that town.
Sutherland said her town was celebrating its 100th anniversary this year, but for at least the past 25 to 30 years, the town has been sharing a lot of resources and partnering with two neighboring towns, Mapleton and Castle Hill, sharing town office space and staff as well as a town manager. The towns also partner to maintain their roads and streets with a joint highway department, she said.
Sutherland said the concept of regionalizing services has long been a practice for many towns. Some share firetrucks, others offer their recreational facility to the surrounding communities at no cost, and others, like Chapman, have joint staff members.
Some towns in western Maine, including Mexico and Rumford, also share administrative and office staff.
Sutherland said she wonders whether the governor and lawmakers realize how many towns are already doing what LePage is suggesting.
“We struggle and we share,” Sutherland said. She said LePage is correct, more regionalization would help, but some towns are doing it already. “I’m very, very fond of endorsing ‘give it a try and see what will work,’” she said. “Because we’ve lived it and it’s worked.”
Without revenue-sharing, Sutherland said her town would have only two options. The first would be to harvest more timber from the town’s forestlands, which it currently uses to help finance government. The second would be to raise property taxes.
Sutherland said the first option is one that wouldn’t be financially stable because over-harvesting the forest would be unsustainable and eventually would produce no revenue.
“Every year, it gets cut and we would like to keep it that way,” Sutherland said.
She said that annual harvest brings the town between $50,000 and $70,000, and while that may not seem like a large amount of money for some towns, it’s a lot for a town like Chapman.
“A lot of us do not have anything to tax except people,” Sutherland said. “We don’t have any industry, we don’t have any nonprofits — hospitals or schools — we just have these folks who want to pay an affordable property tax, if there is such a thing.”
Stephan Bunker, a selectman from Farmington, another member of the MMA’s Executive Committee, said the state’s relationship with its cities and towns has always been a well-respected partnership, but in recent years, that relationship seems to be changing.
He said the concept of revenue-sharing was one example of “an acknowledgement between the role of state government and municipalities that are providing some essential services.”
He said LePage’s proposal has “many implications to our current and ongoing relationship, a lot of implications that have some real bright potential but also consequences to consider.”
Bunker and other members of the committee said they were not there to necessarily discourage lawmakers from fully examining LePage’s budget proposal, but they wanted to make sure towns and cities were being well-represented as that discussion took place.
Lawmakers were equally diplomatic, saying many in the Legislature, including at least three on the Legislative Council, were former elected town or city officials.
“Most of us recognize that our municipalities play an important role in delivering a whole host of services,” said Senate President Mike Thibodeau, R-Winterport. “We are all very proud of our communities that we come from, and because of that, I think each one of us comes with a certain affection for their communities.”
But Thibodeau said the tough economic situation and tight state budgets have made it increasingly difficult for the Legislature to find the funding to share with cities and towns. He said that has led to a changing relationship.
“And some of that has probably been tough on all of you and some of it has probably been good for the taxpayer at the end of the day,” Thibodeau said.
House Speaker Mark Eves, D-North Berwick, said he had a slightly different perspective and that some of his “proudest moments” as a lawmaker were fighting to protect revenue-sharing.
“From my perspective, we are proud of the fight that happened last time, and you can count on us to continue that and put a face to what these services look like in our towns,” Eves said.
As the discussion on the state’s budget progresses, Eves said, it would be important for lawmakers to continue to hear from cities and towns, especially those in rural parts of the state that don’t have nonprofits to make up for the losses they would face if LePage’s proposal moves forward.