Published Date Written by Craig LyonsAs the City Council is poised to begin deliberations on next year's budget, members formalized their opposition to the governor's budget that would shift added costs to municipalities.
The council unanimously passed a resolution opposing Gov. Paul LePage's proposed state budget that cuts revenue sharing, shifts costs for general assistance onto municipalities and makes other cuts that wind up getting picked up by local communities.
Councilor John Anton, who sponsored the resolution, said balancing the state budget on the backs of municipalities is not the way to do it.
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.
"... We are facing financial uncertainty in Augusta unlike anything we've seen in the last quarter century," said Mayor Michael Brennan.
The governor's budget takes almost $400 million of support from the municipalities and gives it back to the state, said Brennan, and there hasn't been a cost shift of that magnitude put in place in recent memory.
Based on the proposal before the Legislature, the reductions in assistance written in the state budget would add $1.32 to the tax rate, according to the city manager's memo.
The biggest hits the city would take under the governor's budget are a $6.17 million loss in revenue sharing; a $2.86 million loss due to changes to general assistance; and a $1 million loss through the conversion from the business equipment tax reimbursement program to a business equipment tax exemption.
City Manager Mark Rees said those losses could increase the city's tax rate by 8.7 percent.
The decision to take a formal stance against LePage's budget came on the same night the council received Rees' proposed 2014 budget and referred it to the Finance Committee for review.
The city manager has proposed a $216.3 million budget for the upcoming fiscal year. The proposal is $9.9 million more than the $206.3 million budget.
The tax rate is anticipated to increase to $9.56, including the city, county and Metro subsidy. The estimated tax rate impact for 2014 is estimated at 31 cents — 26 cents of which is for municipal services with the remaining 5 cents coming from the county and Metro assessments.
Rees said his proposed budget is predicated on LePage's budget not being approved by the Legislature.
Resident Stephen Scharf urged the council not to remand the budget to the Finance Committee until it's structurally balanced. He said that since the manager's budget doesn't account for the potential cuts from the state, it's not balanced and is gambling on the state budget failing to win approval.