Local property taxes are too high, and the state should do more to relieve that burden. That was the message from some who testified today before the Legislature’s Taxation Committee, which is considering several proposals aimed at providing more state aid to local government.
Cities and towns receive most of their revenue to operate from property taxes. And until a few years ago, the state helped ease that burden by sending 5 percent of all sales and income tax revenues back to the towns. But that share has been reduced to about 2 percent, and local property taxpayers like Jim Betts of Winthrop say that has been a particular burden on Mainers with fixed incomes, such as retirees.
“Property taxes are skyrocketing. The state has failed to recognize the responsibilities to school funding and revenue sharing and causing a large part of the problem,” he says.
Voters set a target of 55 percent of the cost of local schools to come from the state. That target has never been met, and other taxpayers lament the fact that they are seeing increased property tax bills even as some services are being cut.
“Because of the state’s decision to cut municipal revenue sharing by 60 percent for years in a row, we now face chronic budgetary shortfalls,” says Waterville City Councilor Winifred Tate. “Our property tax collections have increased dramatically in recent years and we are still struggling to maintain the services our city and region depend on.”
And Michael Crooker, assistant city manager in Bangor, says it’s not just the reduction in revenue sharing that is causing financial strife, it’s the state and federal government mandates and regulations.
“Cities and towns including Bangor have been under an immense amount of pressure in the last few years due to cost shifts and unfunded mandates from the state and federal levels of government. Municipalities are responsible for more services and face more regulatory obligations than ever before,” he says.
One of the bills under consideration would phase in the restoration of revenue sharing to 5 percent. And another measure before the panel, endorsed by the conservative Maine Heritage Policy Center, would provide direct relief to taxpayers instead of sending it to cities and towns.
But it would cost millions of dollars to restore revenue sharing to the 5 percent level.
Republican Rep. Jeff Timberlake of Turner, who serves on the Appropriations Committee, cautioned members of the tax panel any of the bills will need to be paid for.
“I am here to ask you all one question before you pass any of these bills. The question is, how are you going to fund it? You are talking about raising an additional $100 million,” he says.
Timberlake says that kind of money simply isn’t available.
