News

Officials worried about State tax shift
Local burdens increase
By Elizabeth Prata

The citizen anger that generated a 1% tax cap in November was on many municipal officials' minds, including the New Gloucester Selectmen, as they went to create their local budgets. However, the barely missed bullet of drastically reduced property taxes through the proposed cap was not on the Legislator's minds as they produced a budget Saturday morning at about 3:30 that offered avoidance, tax shifts, and uncontrolled salary spending, said Sen. Snowe-Mello to the Selectmen Monday night.

According to a Maine Municipal Association memo sent last Thursday by Geoff Herman to City and Town Managers, the impacts to local municipalities will be direct and indirect. "The budget bill that is designed to finance state government for the next two years as an alternative to the $250 million borrowing plan that was enacted last March has just been printed as LD 1691," the memo reads. LD 1691 was passed, along party lines, early Saturday.

Of most concern to Managers, the state budget as enacted would reduce municipal revenue sharing in Fiscal Year (FY) 2007 by $5 million, a 4% cut.
The bill would also "push" Tree Growth and Veterans' Exemption reimbursement out a month, effectively pushing the payments into the next fiscal year. The state reimbursements to municipalities under the programs Tree Growth and Veterans' Exemption tax law would be delayed, with the effect of these delayed payments resulting in increased property taxes in September for communities with fiscal years that begin on July 1, which include both Gray and New Gloucester.

New Gloucester Manager Rosemary Kulow said that "If we are talking a 4% cut in revenue sharing, that would amount to $14,000. If they do not reimburse the Tree Growth and veterans benefits, it is another $41,000, with the total loss to New Gloucester being about $55,000. I am hoping we can make up some of the difference if we have underestimated revenues," Ms. Kulow said. Left, Kulow.


Senator Lois Snowe-Mello (R-Poland) phrased the State budget as, "The [Democratic] Majority's budget" and lamented that it will have enormous impacts locally. The proposal was recommended by the majority Democrats on the Appropriations Committee.

"I'm very disappointed," she said. "They didn't do the job and look in their own backyard." Sen. Snowe-Mello outlined several places where cuts could have been made. "The Secretary of the Maine Senate makes $100,000 a year, as does the Secretary for the Clerk of the House. There are three State Librarians that make $100,000 each, and there are other positions that are paid very well," Sen. Snowe-Mello said. "I think those salaries are way out of line." Right, Snowe-Mello

New Gloucester Selectmen Chair Steve Libby said that the citizens were close to passing the tax cap in November, and that the Selectmen took that message very seriously when they created this year's budget. The New Gloucester budget's expenditures were flat lined and the overall tax impact was a decrease of almost 2%. "This State budget amounts to a tax shift, and this report may convince them to do it again." Left, Libby.

Another impact of the budget to local municipalities and school departments is the reduction in the School Revolving Renovation Fund. The plan is to pull 5.9 million out of the fund, the result of which "will be a dramatic reduction in the capacity of that Fund to support renovation projects over the next several years," according to the memo by Mr. Herman.

SAD 15 (Gray and New Gloucester) are finalizing a set of applications to the School Revolving Renovation Fund to renovate all of the SAD schools. The Facilities Renovation Update Committee has been meeting for months to prioritize renovation projects district-wide and they have finished the list of projects to be submitted to the State for reimbursement funding.

SAD Board member Peter Pinkerton is Chair of that committee, he said that Superintendent Victoria Burns, Business manager Terry Towle, and Architectural Consultant Lyndon Keck had met with Jay Rettinger, Director of the Renovation program. "They all left feeling positive about the situation. There are not many applications in at this time and they felt that the SAD had a good chance of being funded because there is not a lot of competition for the money," said Mr. Pinkerton. "We are moving forward, and if the State says 'no we are not funding you' then we will deal with it, Mr. Pinkerton said.

There are two parts to the renovation landscape- the projects eligible or reimbursement through the Renovation Funds for the state, and the ones that aren't. The SAD will put forth a bond in November to request funding locally for those projects that are not eligible for money from the State. Every dollar that is not reimbursed from the State Renovation Fund would be added to the local burden.

Rep. Susan Austin (R-Gray) said that, "Towns and school systems will be affected right along with every citizen. New taxes on our Energy, telephone, gas, paint and an assessment tax on private and self insured plans of up to 4% to support Dirigo Health, to name a few....why weren't enough Legislators listening to "the people" to stop this?" Left, Austin