Earlier this week, I wrote a letter to the editor of my local newspaper (included below). In doing research for the letter, I came across a spreadsheet produced by the State Treasurer’s office that provides insight into how much money towns are losing as a result of cuts to state revenue sharing. I thought this might be of interest to others and have posted it on MECEP’s website. Note: MECEP did the calculations in the last column showing how much each town loses in state aid. It turns out Portland loses close to $2.7 million while Lincoln Plantation loses about $400. The average is about $90,000. Follow the link above to see how these cuts are affecting your town. Read on to see how the “Great Tax Shift” is impacting property taxes in my community.
False Choice at the Heart of Police Department Debate
Concerned about the proposed elimination of Damariscotta’s Police Department? Look no further than the state budget. The income tax cuts approved by Governor LePage and the 125th Legislature are nothing more than a tax shift to local towns and property taxpayers. They’re forcing towns to cut services, deplete reserves, or raise property taxes. How so?
Take the police department. Initial reports about this proposal indicate that it will save the town approximately $70,000. Local residents and business owners are justified in their concerns about what this may mean for public safety. They have clearly stated their willingness to pay more in property taxes to keep a local police department.
This is a false choice that is a direct result of the tax shift created by Governor LePage’s budget. One way the Governor pays for income tax cuts that disproportionately benefit Maine’s wealthiest residents is by cutting state aid to towns for road maintenance, fire and police protection, and other services. Damariscotta will lose more than $70,000 in fiscal year 2013. Without these cuts, Damariscotta could keep its police department without having to increase property taxes.
Of course, property taxes are facing upward pressure in other ways. In 2005, Maine voters called on the Governor and Legislature to pay for 55% of the cost of educating our kids. We were making steady progress toward that goal until the most recent budget. Today, the state is contributing $65 million less toward education than it did in 2008. That means the state’s share has declined to 52% of the costs in 2008 to 45% of the costs today. To maintain educational quality and avoid laying off local teachers, towns are being forced to increase property taxes.
While we feel the bite of property tax increases locally, the reality is that the reason they are increasing has more to do with the false choices being imposed by budget decisions at the state level.
MECEP’s recent report (The Consequences of Maine’s Income Tax Cuts) provides more detailed information on the impact on local governments and property taxpayers.