AUGUSTA — City councilors are concerned local taxpayers will be hurt by the ongoing state budget battle and escalating conflicts between legislators and Gov. Paul LePage that include matters as seemingly trivial as a television outside the governor’s office.

Uncertainty over the state budget and its local impact is a major reason several councilors said Thursday they can’t support the proposed $52.6 million city and school budget and the 6.1 percent tax increase it would bring.

“Given what has been happening over at the State House, if they get something in front of the governor, he’s going to veto it and the Legislature isn’t going to pick up enough votes to override it,” City Councilor Cecil Munson said. “Nothing going on there tells me any taxation bill that is at odds with the governor’s proposal is going to be passed by him. We can anticipate, as a result, we’ll be spending an additional million-and-a-half to make up for the loss of revenue sharing.

“I believe that’s going to happen. We have to anticipate we are going to be saddled with that loss of revenue. I think we need to look at tightening up the belt.”

LePage’s state budget proposal would suspend state revenue sharing payments to municipalities for two years, which would cost Augusta about $1.7 million in revenues each year.

City Manager William Bridgeo’s budget proposal banks on the city receiving revenue sharing funds from the state. If it doesn’t, replacing that lost revenue with property tax proceeds would increase property taxes an additional 6 percent, to a 12 percent increase over the current year.

Cutting city staff so the loss of state revenue sharing would have no impact on taxpayers would require cutting 35 workers from the city’s 204 person staff, according to Bridgeo.

Six of the eight city councilors indicated they could not support the budget as proposed, with a more than 6 percent property tax increase. Several cited uncertainty over the state budget and how it could impact local taxpayers as a reason to look for further cuts to the city and school budget.

“I can’t support a 6 percent increase,” said Councilor Daniel Emery. “And to make a decision before we know what the state is going to do makes me very uncomfortable.”

Republican state Sen. Roger Katz, former mayor of Augusta, sponsored legislation seeking to restore revenue sharing to municipalities to the state budget, and is also a member of the “gang of 11,” a group of legislators advocating for sweeping tax reform in Maine. Their proposal seeks to ease the burden on property taxpayers by increasing and expanding other revenue sources, such as the sales tax.

He said the Appropriations Committee is currently working “day and night” to try to reach a bipartisan agreement on the budget but “the real heavy lifting still awaits them.”

“The decisions that are going to affect local revenue sharing are clearly among the most difficult ones they’ll have to make,” Katz said.

Legislators from both the Republican and Democratic parties are pushing for state budget solutions that would not result in local property tax increases, Katz said. He believes suspending revenue sharing will force municipalities, Augusta included, to raise taxes.

“Whether it’s the tax reform package the gang of 11 is advocating, or simply revenue sharing money being put back in, I think the chances the governor’s budget will pass as drafted are slim to none,” Katz said. “Those of us who have been in municipal government before, we recognize suspending revenue sharing is inevitably going to lead to property tax increases. Being a former mayor, I understand the difficult situation we’re putting the city in, because they’re trying to complete their budget now, without knowing what they can expect from us in revenue sharing.”

Some city councilors suggested the city may need to postpone a scheduled June 11 referendum on the proposed $27.56 million school share of the city and school budget, to wait for the state budget to be settled enough so Augusta knows how much state revenue it can expect to receive.

But Councilor Michael Byron said there is no benefit to delaying action on the local budget. He encouraged councilors to be ready, at their next budget session, to set a target tax rate less than the currently proposed 6.1 percent, then cut the school and or city budget to reduce spending to get to that target.

He also said he doesn’t think state revenue sharing will be suspended from the state budget.

“We’re going to have to determine what we think is an acceptable (tax) rate and work back from that,” Byron said. “And we have to do it as quickly as possible. We’ve got to target on a number, agree to that, and see where the cuts come.”

Only Councilor David Rollins spoke in favor of passing at least the school spending portion of the overall city budget, which by itself would require a 5 percent tax increase. Voters decide whether to approve the school budget in a June 11 referendum.

“I think (the school budget) has merit to go to our community for a vote,” said Rollins, whose wife, Jan Rollins, is an assistant principal at Cony High School. “I don’t think the eight of us (councilors) up here have the conclusive evidence to know the consciousness of the community.”

Other councilors suggested the school budget will have to be cut. They suggested teacher retirement and insurance cost estimates as places to start.

The Board of Education meets at 7:30 p.m. May 28 at Capital Area Technical Center to discuss the school budget proposal.

Councilors next meet to work on the combined city and school budget at 6:30 p.m. May 30 in council chambers at Augusta City Center.

Keith Edwards — 621-5647
kedwards@centralmaine.com