LEWISTON — Another year of reductions to state revenue-sharing could force deeper cuts or higher local property taxes, city officials say.
“We are losing close to $2 million, and it’s actually more than they cut last year,” City Administrator Ed Barrett said.
State legislators are scheduled to consider reducing municipal revenue-sharing across the state from $60 million to $20 million for the 2014-15 fiscal year.
In Lewiston, that revenue would be reduced from a projected $2.6 million to $881,030.
“It’s more than a total 25 percent reduction in our non-property tax revenue, and that’s significant,” Barrett said. “We can respond by cutting or increasing property taxes. If we increase taxes, it would raise our property tax rate by $1.06.”
A tax rate increase of $1.06 per $1,000 of property value would mean an additional $160 on the tax bill for a home valued at $150,000.
“There is really nothing left in our budget that can be cut,” Barrett said. “All of our capital items are funded by borrowing or our fund balances. We’ve cut numerous line items already, reduced maintenance overall and reduced staff by 20 percent over the last 12 years.”
The Legislature’s Appropriations and Financial Affairs Committee is scheduled to discuss the matter at its Jan. 22 meeting at 10 a.m. in State House Room 228.
Revenue-sharing is money generated by sales taxes across Maine, collected by state government and given to Maine municipalities to reduce property taxes.
The state reduced the share it gave to municipalities in 2012 and again in 2013.
According to numbers generated by the Maine Municipal Association, the state allocated $121 million to municipal revenue-sharing in 2009. By the 2012-13 fiscal year, that number was reduced to $96 million.
Last year, legislators provided $65 million to Maine cities and towns and would provide $20 million next year, according to the current plan.
Barrett said it’s one of the biggest hurdles for Lewiston’s budget. The city received $4.7 million from the state in 2009 but could expect $881,030 next year.
“Obviously, the council would be left with some very hard choices as to how much further we can reduce operations and how much we can pass on to the property tax,” Barrett said. “Realistically, what is left for us to cut, other than reducing core services and reducing our ability to respond to the public?”
Barrett said he plans to be at the Jan. 22 hearing, front and center, to testify.
“We certainly urge members of the public concerned about property taxes to express their concerns to their legislators,” Barrett said.
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