Public Hearing about Revenue Sharing and Governor LePage’s Proposed Biennial Budget

Public Hearing about Revenue Sharing and Governor LePage’s Proposed Biennial Budget

When and Where?

Wednesday March 13, 2013 at 1:00 pm

Room 228, State House

What is the Biennial Budget?

Unlike in some other states, Maine passes a budget for two fiscal years. According to Maine’s constitution, the state must have a balanced budget. If state continues spending and taxing the way it is now, it would run a $756 million deficit over the course of the next two fiscal years. These estimates are reflections of a structural gap between the revenues the state collects and the programs it promises to fund (but often fails to do so). In order to balance the budget, Governor LePage has proposed a budget that cuts funding for many essential programs, but makes few structural changes that would improve Maine’s fiscal situation in the long term. Revenue sharing, the Homestead property tax exemption and the Circuit Breaker property tax relief program are among the programs cut or significantly defunded in Governor LePage’s proposed budget.

What is Revenue Sharing?

At its core, revenue sharing is a mechanism for the state to distribute state-collected funds, such as sales tax revenue, to the towns. This is different from direct contribution to a program it has mandated because there are very few restrictions placed on what this money may be used for. Five percent of the State’s monthly sales, corporate and income tax revenue is set aside to fund this program. The amount each town receives is based on its state valuation, tax assessment and population. Towns with the highest property taxes relative to the value of taxable property as assessed by the state will receive the most funding under the revenue sharing program. Basically, towns which have the potential to easily increase their income from property taxes will receive less money from the revenue sharing program than towns that cannot raise their income so easily.

How will the Biennial Budget affect Brunswick?

Without the revenue sharing program, Brunswick will lose $2.1 million dollars in income over the next two years. In order to make up for this lost revenue, Brunswick would need to raise property taxes to maintain the services it currently provides. To maintain services at current levels, Brunswick will need to raise taxes by $166 on a home worth $100,000. While this is certainly a burden on taxpayers, other provisions of Governor LePage’s budget will place further strain on property taxpayers.

Governor LePage’s budget would also end the Homestead property tax exemption for anyone under the age of 65. This means that these homeowners would no longer receive a property tax credit on their primary residence. This will cost taxpayers another $156. The total impact of the proposed Biennial Budget on a homeowner in a $100,000 home will be $322. Governor LePage’s budget, while claiming not to raise any revenue, shifts the burden for the state’s deficit from the state to towns and homeowners.

Unfortunately, the bad news for homeowners doesn’t end here. The proposed budget also cuts the Circuit Breaker property tax relief program, which provides relief for homeowners and renters whose property taxes or rent exceed a certain percentage of their income. The average Circuit Breaker benefit to Brunswick residents that will be lost in this proposed budget is $512. This means that individuals already facing a high tax burden relative to their income will now be responsible for $834 more each year in property taxes.

What can you do about this?

Come testify! The legislature wants to hear from people who will be impacted by this budget. Community input not only informs legislators decisions, a large turnout for or against a bill can make a big difference in the final version that is passed. Over the course of the next month there will be hearings about many aspects of the proposed budget. Here are some of the most important meetings:

  • Suspension of Revenue Sharing, cuts to Circuit Breaker and Homestead Exemption: Wednesday, March 13 at 1 p.m. in State House Room 228
  • Cuts to Education, including the shift in teacher retirement costs to municipalities: Monday, March 18 at 1 p.m. in State House Room 228
  • Cuts to Maine’s Drugs for the Elderly Program: Thursday, April 4 at 1 p.m. in State House Room 228

If you plan to speak at a public hearing, it is often useful to prepare and distribute your comments in written form. In preparing testimony, written or not, make sure you introduce yourself and, if you represent an organization, give the name of the organization. State whether you support the bill, oppose it or are offering suggestions to improve it, and then explain your reasoning. If you do provide written testimony, bring at least 25 copies and give them to the committee clerk before you testify. Photocopiers are available in the Law and Legislative Reference Library in Room 200 of the State House for a nominal charge.

For a helpful guide on testifying at the Maine Legislature please see this great handout from the Office of Policy and Legal Analysis: http://www.maine.gov/legis/opla/citizensguide.pdf

Can’t make it to the hearing?

The hearing tomorrow will be broadcast on MPBN’s Maine Capital Connection which is available both over the air or on Time Warner Cable. For those of us who don’t have TV or those of us who have Comcast can view the channel online at:

https://www.mpbn.net/News/MaineCapitolConnection.aspx

You can also listen to hearing online at the Education Committee website: http://www.maine.gov/legis/audio/education_cmte.html

Hearings are also being planned in various locations around the state for people who might not be able to make it to Augusta. Dates and locations for those meetings will be posted here as information is made available.

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This post was written by
Matthea “Mattie” Daughtry, a Brunswick native, is the State Representative for the Maine House District 66

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