Lincolnville selectmen discuss impacts of LePage budget proposals

By Jenna Lookner | Jan 30, 2013

Lincolnville — Maine District 23 State Sen. Michael Thibodeau and Maine District 44 State Rep. Jethro Pease were among attendees at a regularly scheduled meeting of the Lincolnville Board of Selectmen Jan. 28. The two elected officials were invited to attend a discussion of the estimated impacts of Gov. Paul LePage's proposed fiscal year 2014-2015 budget on the town of Lincolnville.

Discussion of the proposed state budget was included on the selectmen's agenda following a request from Lincolnville Selectman Jason Trundy during the board's Jan.15 meeting. Lincolnville Town Administrator David Kinney invited Thibodeau and Pease to attend the meeting, he said.

The governor's biennial budget and budget message were released Jan. 11.

In a Jan. 25 memo to selectmen, Kinney outlined the potential impacts of the proposed budget on Lincolnville. In the introduction to the memo, Kinney cautioned that the proposed state budget was in early stages and not finalized, and explained that it is challenging to “get a true handle on the impacts” at this preliminary stage. He wrote that his assessment of the impacts as detailed in the memo reflection of his “best estimate as of [Jan. 25].”

"Until we get real, concrete numbers from the state of Maine it's all kind of speculation," Kinney said in a Jan. 29 phone interview.

According to the memo from Kinney, a preliminary estimate of the impact of the governor's proposed budget to the town of Lincolnville could be as much as $462,034, a loss that equates to about 26 percent of Lincolnville's fiscal year 2013 municipal budget of slightly more than $1.7 million.

The governor’s proposed budget includes a two-year suspension of municipal revenue sharing, Kinney said. Lincolnville would lose approximately $185,754 annually, according to the memo. State Municipal Revenue Sharing was enacted in 1972 to "'stabilize the municipal property tax burden and to aid in financing all municipal services,'" Kinney wrote.

"By the statute, 5 percent of the state government’s monthly sales, corporate and personal income tax revenues are set aside to fund the municipal revenue sharing pool. These funds are then distributed to the municipality based on a formula whose variables include municipal population, state valuation and tax assessments," Kinney wrote.

He stated that during the past four years, the 5 percent of state sales historically utilized for municipal revenue sharing has instead been transferred into the state's general fund.

"Thus the originally intended 5 percent has not been set aside in the pool for distribution [to municipalities]," he wrote.

Funding for education would be also be profoundly impacted. According to Kinney's estimate the proposed budget "contains language" that would shift a portion of teachers' retirement plan funding onto municipalities.

Because Lincolnville is considered a "wealthier" community based on a formula based in part on the percentage of the mil rate raised for education, the bill for Lincolnville Central School teachers’ retirement funds could fall entirely on the municipality, Kinney wrote.

Citing an audit report, Kinney explained that "the 'On Behalf Payment' made to the retirement fund for the covered employees at the Lincolnville Central School has averaged $201,594. The Five Town Community School District (Camden Hills Regional High School) has estimated the CSD will pay an additional $356,381 in Maine State Retirement. If Lincolnville’s allocation percentage remains the same (0.1699), [the] town assessment on the additional retirement for the Five Town CSD would be $60,549," Kinney wrote.

According to the memo, Lincolnville would be responsible for an additional $262,143 contribution towards kindergarten through 12th-grade education funding.

The proposed budget would also impact a number of programs to a lesser degree, including shifts to the homestead tax exemption, general assistance and eligibility for business tax exemption.

The appropriation of excise tax collected on tractor trailer trucks registered in Lincolnville would be remitted to the state under the proposals, those registrations generate approximately $2,040 in revenue, according to the memo.

"While [remitting truck excise tax] may not have a major financial bearing it might be the start of a 'slippery slope' where in future years more and more excise tax is appropriated by the state," Kinney wrote.

Kinney estimated that without "measures implemented to mitigate the loss of revenue" such as elimination or change to municipal programs and services, the impact on the property tax rate in Lincolnville would elevate property taxes by 8.1 percent.

At the meeting Thibodeau and Pease reiterated that the governor’s budget is an initial proposal and subject to change, Kinney said.

Thibodeau and Pease told Lincolnville Selectmen the goal for completion of the final state budget is April, Kinney said. He said both elected officials were diplomatic and interested in hearing the concerns specific to Lincolnville.

"They were attentive listeners and open to suggestions, they weren't defending [the proposed budget] but they weren't running from it," said Kinney.

The discussion was purely informational, said Kinney, adding no action or votes were taken by the Lincolnville Board of Selectmen pertaining to the governor’s proposed budget.

Courier Publications reporter Jenna Lookner can be reached 236-8511 or by email at jlookner@courierpublicationsllc.com.

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