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City estimates $12 million loss if state budget left unchanged

Portland's city manager is anticipating that property owners will take a $387 hit on their tax bills based on Gov. Paul LePage's proposed biennial budget.
"That's a major impact on our residents," City Manager Mark Rees said, when he presented the City Council's Legislative Committee and members of the legislative delegation a breakdown on the impacts the governor's budget would have on the city.
In January, LePage presented the Legislature with a $6.2 billion budget for the next biennium. The governor's budget included cuts to revenue sharing, social service programs and several tax exemption programs.
The proposal is being reviewed by the Legislature.
"It's a very serious situation," said Mayor Michael Brennan, during an interview Monday, the city is faced with losing at least $12 million from the state that would impact services that are critical to the city.
Brennan said it's not acceptable to have to chose between reducing services or increasing taxes.
When it comes to direct impact on the city's budget, the city stands to lose $12.73 million in revenue from the state, according to the city manager, and that would add $1.70 to the tax rate, for an average impact of $387 per property owner.
The budget items that stand to impact property owners include:
• A $6.17 million loss in revenue sharing.
• A $35,000 cut to essential programs and services.
• A $1.09 million hit through teachers' retirement shift.
• A $1.2 million loss from a general assistance shift due to CAP.
• A $2.43 million loss to general assistance through the elimination of the 90 percent upper tier.
• A $772,000 loss to general assistance through a limitation on shelter reimbursement.
• A $21,000 loss to general assistance from changes to TANF and GA eligibility guidelines.
• A $10,000 loss due to the appropriation of the "truck tractor" excise tax.
• A $1 million loss through the conversion of the business equipment tax reimbursement program to a business equipment tax exemption.
Rees said the revenue loss from the limitations on shelter reimbursement and the TANF and GA eligibility guidelines are contingent on the city maintaining the same level of service rather than impose cuts in its own budget.
Aside from the direct impact on the municipal budget, changes to the homestead exemption and the circuit breaker exemption would add another $763 to the hit property owners will take.
Brennan said there's potentially a simple fix the the downshifting issue — suspending the $400 million income tax reduction passed during the last Legislative session.
The amount that's being shifted to the municipalities is almost exactly
Brennan said when the governor claims the state doesn't have money it's partially due to things like the tax reductions that passed but were never funded.

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