Look at the chart above.
Really, really look at it.
It shows the amount Maine municipalities get from the state every year from taxes generated from Maine’s economy. What’s missing: the amount the state has decided to keep in recent years to pay its own bills.
Every month, the state controller is legally required to transfer 5 percent of all individual and corporate income taxes, franchise taxes, service provider taxes, and sales and use taxes from the General Fund into the Local Government Fund. Those deposits are intended to be distributed to Maine’s cities, towns and territories as part of the state’s municipal revenue sharing program.
In 1992, for the first time, state government took $30 million out of that 5 percent that’s supposed to go to municipalities. Lawmakers did it in order to meet state expenses in what appeared to be a one-time raid.
That exception was not to be.
While in office, Gov. John Baldacci made it standard practice to raid the fund, taking money in fiscal years 2004, 2005, 2007 and 2010, calling each withdrawal a “one-time transfer.” Raiding has since continued, including the last and largest transfer of $44.3 million in fiscal year 2013.
That money was and is statutorily reserved for municipalities.
On Monday, the Office of the State Treasurer released the projected revenue sharing funds that towns throughout Maine can expect to receive in the coming year, FY 15. We charted those projected funds for the towns where the Sun Journal has bureau offices, and also for Augusta, Bangor and Portland, and each will receive less than in FY 14.
The amount of revenue sharing each municipality receives is based on a mildly complex formula of population and local property tax burden.
The state controller doesn’t calculate the revenue sharing dollars per resident in each town, as we did in our chart. We thought the per-capita figures would be helpful.
As you can see, with the exception of FY 10, Rumford has received a higher per capita amount under revenue sharing than other bigger cities in Maine, including Portland. And, with the exception of FY 12, Norway has consistently been a low receiver.
What you will also see from these numbers is that in FY 15, Maine’s towns are expected to get a fraction of what they have been getting in past years, largely because the fund doesn’t contain the money it’s supposed to.
Auburn will receive just 42 percent of the funds it got in FY 10. Lewiston will fare better, getting 57 percent of the funds it received in FY 10; Rumford and Farmington will fare just slightly better than that.
Portland is expected to receive about half of the funds it got in FY 10, and both Augusta and Bangor will get less than half.
That’s a sad retreat over the years, particularly during a time when municipal expenses have climbed.
The amounts are well under what these towns should rightly be getting based on the original revenue sharing statute, and the damage this year could have been far worse if the Legislature had not voted last month to restore $40 million in revenue sharing money that Gov. Paul LePage eliminated from the current two-year budget. That money amounted to two-thirds of all projected distributions for FY 15 and its loss would have been devastating for towns.
Maine’s revenue sharing statute passed into law in 1971 and was tweaked several times over the next two decades to augment aid to towns. Then, in 1991, the Legislature started using the Local Government Fund as a piggy bank, taking money out for General Fund purposes and replacing that money from other accounts, including moving money over from the Highway Fund in 2003 to restore revenue sharing.
Over the past decade, the raids really ramped up and the money was not always restored. Towns have suffered.
That has to stop.
Just because state government has trouble paying its bills doesn’t mean it should withdraw money from a fund that is statutorily designated to help towns.
The Legislature restored the Local Government Fund this year, but that doesn’t mean it will remain safe nor should it mean that lawmakers should call this a job well done and move along.
We are now in an election cycle for the 127th Legislature and every person who qualifies for the November ballot must give thought to stabilizing the Local Government Fund and giving Maine’s towns some protection from future raids.
Make it a priority.
jmeyer@sunjournal.com
The opinions expressed in this column reflect the views of the ownership and the editorial board.
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