LePage refuses to consider mayors' alternatives to revenue sharing cuts

Posted Wednesday, May 15, 2013 in News

LePage refuses to consider mayors' alternatives to revenue sharing cuts

by Gina Hamilton

AUGUSTA -- Gov. Paul LePage dismissed several ideas from a group representing mayors of 12 Maine cities to avoid the draconian cuts to revenue sharing that LePage has proposed to bring the budget into balance over the next two years.

In a letter on Tuesday to LePage, the mayors suggested three alternatives to the governor's proposal to eliminating state revenue sharing payments to municipalities during the biennial budget cycle beginning July 1. The mayors suggested delaying tax cuts, creating a temporary sales tax increase, and comprehensive tax reform similar to the plan presented last week by a bipartisan group of lawmakers.

LePage rejected all three options, saying that the real problem is state overspending, and refused to consider "adding to the tax burden of hardworking Mainers."

In his letter that addressed municipal officials’ criticisms of his budget, LePage listed education, welfare and revenue sharing as the three “large pots of money” that he could tap to meet the constitutional mandate to present a balanced state budget. “I chose revenue sharing,” he wrote. LePage also offered the state’s “flexibility” to municipalities seeking “to reduce their own budgets.”

The mayors' group said that municipalities have already absorbed $40 million a year in revenue sharing cuts, and that the towns need money, not 'flexibility'. They prefer to delay the income tax cuts until Maine recovers from the economic recession. 

Delaying income tax cuts would restore $350 million in state revenues over the next two years, which would keep revenue sharing at the current 3.5 percent level, which is down from the historic 5 percent level it has typically enjoyed. 

Increasing the sales tax temporarily during the tourist season and hiking the lodging tax to 10 percent would transfer a greater amount of Maine's sales tax burden to out of state visitors. 

A permanent solution, addressing comprehensive tax reform to balance sales, income and property taxes, is the subject of LD 1496, which was considered by the Tax Committee on Tuesday.  LePage is opposed to the proposal.

The coalition includes mayors of Portland, Bangor, Augusta, Waterville, Lewiston, Auburn, and other towns, mostly in south and central Maine.

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