Friday, May 30, 2008

The Maine Mantra: Relief to Taxpayers


Taxpayers everywhere, not just in Maine, want relief.
But Mainers, more than most, may be entitled to it. Year after year the Tax Foundation has ranked Maine among the two or three most heavily taxed states in terms of the combined state and local tax burden as a percentage of per capita income. Maine's figure of 14% compares to the national average of 11%.

Governor John Baldacci would like Maine to retreat to the middle of the pack. In 2005 he signed LD 1, a measure to limit year-to-year increases in public spending at all levels--municipalities, school districts, counties, and state. Formulas were devised to calculate for each budget a Growth Limitation Factor, itself a function of changes in average personal income and property valuation. Each town must calculate its own GLF, which is the maximum percentage increase that may be applied to its Property Tax Levy Limit. Any spending above the limit must be approved through an override vote.

My town, good old Peru, Maine, will act on a proposed 2008-09 budget by referendum on June 10. For the first time, Peruvians will be asked by the Selectmen to override the LD 1 cap. Actually, the Selectmen nearly forgot to ask. When it was pointed out to the Board that the municipal budget would expand by 9.2% with passage of all articles, somebody said uh-oh! and called the Maine Municipal Association for guidance. Hence Article 3-A , a late insertion to the warrant that first appeared in the annual town report.

At a public hearing last night, the Selectmen justified the juiced-up Levy Limit by insisting that the budgets for 2006 and 2007 were artificially lean and that you cannot run a town for so little money. I happened to chair the Board during those two cycles. So if anyone deserves scorn for holding the line, it is I. [Never mind that the merger with SAD 21 was growing Peru's school spending by double digits annually, effectively starving the rest of the budget.]

If Article 3-A and all subsequent spending articles are passed, the municipal budget for 2008-09 will reach $583,400. Together with an expected $1.3 million school assessment and a $76,853 county assessment, total appropriations will fall just shy of $2 million. The total tax commitment will come in at roughly $1.555 million, which, according to Selectman Jim Pulsifer, may raise Peru's mill rate from 14.3 to as much as 16. Bon appetit.

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