2010-04-21 / Op-Ed

The State of Maine needs to face its obligation

COMMENTARY
By Irv Faunce

It is time to blow a well-established myth out of the water.

Our Governor, and many members of the Legislature, would have us believe that, over the past several years, there have been no increases in any “broad based” tax.

In fact, that is not true. Here is what is true for all who own real estate in Maine.

Property taxes are going up. They have been going up at a fairly steady rate over the past three years. The Maine Revenue Services reports that the property tax now generates 41 percent of all tax revenue collected statewide.

The property tax had been just one third of the revenue stream with the sales tax and state income tax sharing the remaining two-thirds of the mix. But no longer.

Again, according to Maine Revenue Services, the statewide property tax rate has increased from its low of 4.24 per cent in 2007 to a current rate of 4.82.

Here’s what else is true. The Governor and the Legislature have systematically “shifted” tax responsibility from the progressive statewide income tax and from a tax on consumption to the regressive property tax. (Progressive means that you pay more as you earn more; consumption means you pay as you buy; and regressive means that you pay no matter what your income or ability to pay.)

This is not “theory” or a “big picture” problem.

It is very real, for example, in the Town of Wilton where I serve as a selectman.

We have developed a proposed municipal budget for Fiscal Year 2011 that maintains services pretty much where they are now. In fact, the expenditure level for FY 2011 is $27,980 LESS than the current fiscal year and $51,642 LESS than FY 2009. Spending is going down.

The bad news is that during this same two-year time period, our Municipal Revenue Sharing (the share of state and local income taxes that are distributed to all towns) has decreased by $129,000. Remember that shift I mentioned? Auto excise taxes are also decreasing, by the way.

So, our municipal services draft budget for FY’11 increases the property tax commitment by $123,000.

Then comes our share of Mt Blue Regional School Unit #9. That bill ADDS $172,362 to our property tax bill. While the town has had a valuation increase of 15 percent and the GPA formula penalizes us for it, the State has again failed to pay the 55 percent share mandated by voters in 2005. In fact, the State share is now less than 47 percent. The shift goes on.

Finally, Franklin County Commissioners just completed two days of listening to budget presentations that, if enacted, would ADD $450,000 to the Tax Assessment for all of the county’s towns. That’s an 11-percent increase that, for Wilton, will amount to an additional $25,000 on the property tax bill.

So, let’s do the math. For Wilton, $123,000 from the Municipal budget plus $172,362 from RSU #9 plus $25,000 from the County adds up to an INCREASE of $320,362 on the property tax assessment for the next fiscal year. That is a 2.4 mil increase, or $240 for every $100,000 of valuation.

That is unacceptable.

So, let’s get back to the myth of “no increase in broad-based taxes.”

It is very difficult to be an elected local official and not feel the pain of increasing property taxes, decreasing local services and economic distress with all of its implications for our communities.

Of course, this says nothing of our collective inability to make the investments in education and infrastructure that are critical to economic development, job creation and retaining young people in our region.

The State of Maine needs to face its obligation to make the necessary investments in education and in our infrastructure and to assure that we can offer a hand “up” to those who want to stay in Maine and participate in our economy.

This continual shifting of responsibility away from Augusta and onto the backs of local government and local property taxpayers is eroding our capacity to provide our towns with public safety, well maintained roads and bridges, water and sewer systems that work and education that will prepare us for the 21st century.

This shift onto the property tax is not sustainable.

Anything else is just a myth.

Irv Faunce is a resident and selectman of Wilton.

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