Attention property taxpayers: “Shift and shaft” is coming to your town, compliments of the governor, who proposes elimination of all state revenue sharing to Maine’s cities and towns.
Let’s rewind the tape to 2009. A Morning Sentinel headline read: “State reimbursement to schools changed, Waterville loses $1.1 million.”
It is a few days later when “front page LePage,” as Waterville Mayor Paul LePage likes to be called, goes on the attack. “Waterville mayor blasts Baldacci,” the headline read. LePage said Gov. John Baldacci was forcing costly unfunded mandates onto communities that cannot afford them. “All they’re doing is transferring state responsibility onto (local) taxpayers,” the story read. It was shortly thereafter that LePage announced that he would run for governor, in a press release that I wrote.
Now let’s fast-forward the tape. It is Jan. 13, 2015, the Portland Press Herald headline reads “LePage’s tax reform plan rattles Maine’s towns, non-profits. The governor’s proposal to end all revenue sharing and let municipalities tax hospitals and colleges raises concerns, an early sign of the intense debate likely in the Legislature.”
The governor defends his 180-degree reversal about revenue sharing simply: That was then; this is now. LePage liked revenue sharing when he was mayor of Waterville, but not so much as governor of Maine. Now he wishes to eliminate the decades-old covenant between the state and municipalities, because the state budget is now his budget, and he will reduce it by transferring more of the burden to municipal property taxpayers. He now sees his responsibility to his constituents differently and is willing to take away tax revenue produced by individual cities and towns and owed to them.
The governor’s formula depends upon taxing for the first time hospitals, private colleges and all charitable institutions with appraised valuation of at least $500,000. Maine’s many small towns have none of these, however, and therefore will lose the most, because they will receive no revenue from his plan.
In central Maine, MaineGeneral Medical Center and the Alfond Cancer Center in Augusta, along with Waterville’s hospitals and private colleges, Colby and Thomas, all will be affected greatly. Joining the mix likely will be nonprofits such as the Kennebec Valley YMCA in Augusta and other charitable scientific, fraternal and veterans organizations in Waterville and the capital city. Hospitals, colleges and the Y all have been involved recently in difficult fund raising campaigns.
None of these entities can absorb a new expense of millions of dollars in taxes. They all rely on the generosity of the public and private supporters in collaboration with them because of the services they provide to our health and well-being and the education of our children. To impose responsibility on our hospitals, colleges and charitable organizations for making up the elimination of $60 million in revenue that belongs to Maine’s cities and towns is a blueprint for financial disaster for facilities and institutions critical to our state’s survival.
“It is safe to say that it will cost hospitals tens of millions on top of $100 million in unreimbursed care that hospitals already provide to uninsured Mainers,” said Jeff Austin, spokesman for the Maine Hospital Association. “The vast majority of states don’t tax hospitals for a simple reason: a tax on a hospital is a tax on our customers.”
Some college presidents have pointed out that they provide millions in financial aid to students and offer many valuable social programs. Clayton Spencer, president of Bates College, summed up her reaction and that of her counterparts throughout the state: “We all work very hard to control our costs. Adding significant new expenses to our budget (through taxation) would threaten our ability to provide these services.”
Analyst Geoff Herman, head of the Maine Municipal Association’s legislative division, summed up the governor’s tax-shift plan. “It is a lopsided swap. The governor proposes to take away $1 and give back 50 cents to cities and towns. Taking away revenue sharing is going to increase property taxes statewide, that’s a given.”
I agree that we need tax reform, but LePage’s budget proposal is not the right way to go about it. I urge my readers to contact their state senators and representatives, as well as Sen. Roger Katz, R-Augusta, head of the appropriations committee, who last year was part of the “gang of six” who presented a much better tax reform idea.
Don Roberts, a former city councilor and former vice chairman of the Charter Commission in Augusta, is a trustee of the Greater Augusta Utility District.
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