In New Gloucester, town officials are asking voters to eliminate four town positions while increasing property taxes by 8 percent.
Farmington is looking at making cuts to its police department. And in Hallowell, city officials are holding off on making spending decisions, waiting to see just how bad the revenue picture is for May and June.
In more than 400 towns across Maine, elected officials and government managers are making painful choices as they try to hold down property taxes and balance budgets during a coronavirus-induced recession that continues to erode municipal revenues.
Almost all know there will be pressure to keep key local services like police and fire departments healthy, but they anticipate far less state support in 2021.
With most municipalities’ fiscal years coming to a close on June 30, town managers are racing against the clock to build new budgets. Many of those budgets will go to voters for approval during the July 14 primary election, replacing the budget ratification votes that typically happen during town meetings.
Although town revenue shortfalls may pale in comparison to the revenue losses state policy makers could be facing, the local consequences can be far more personal and dire.
“It’s actually heart-wrenching and something committee members have lost sleep over,” said Peter Bragdon, chairman of New Gloucester’s town budget committee.
The town’s $8.5 million budget proposal includes an 8 percent property tax increase while eliminating town government positions, including the recreation director, assistant librarian and public works employees.
“We don’t take lightly taking anybody’s livelihood from them,” Bragdon said, noting that in small towns a laid-off employee could be a friend, neighbor or family member. Those on the chopping block are there not because they did a poor job, but because the town just won’t have the money to keep them.
“We have to really look at the question, ‘Can the town function without this position, no matter who is in it?'” Bragdon said.
Even with the changes, if they are ultimately approved, the town’s budget will grow by $290,000 and hike taxes on a $250,000 home another $332.50.
Town governments are largely funded by property taxes, motor vehicle excise taxes and a portion of the sales tax revenues collected by the state. Many supplemental budgets – which contain fees collected for programs and services, such as recreation department activities – also are being affected by physical distancing requirements adopted to stop the spread of COVID-19, the disease caused by the coronavirus.
Under an executive order by Gov. Janet Mills, budget votes that normally occur at town meetings will be taken by ballot during the July 14 primary, but some towns have postponed their meetings until later in the summer while operating government on temporary budgets that flat-line spending.
Some towns have gone forward with meetings that comply with physical distancing, keeping gatherings under 50 people with voters spaced 6 feet apart.
The Franklin County town of Chesterville approved its $2.4 million budget with 44 voters present on June 1. When objections were made that too few voters were deciding the budget, one selectman noted that only 48 people participated in the town meeting in 2019.
Overall, Chesterville’s budget is up $70,000 from last year but much of that increase comes from budget lines town officials have no control over, including the school board’s budget and county services, such as jails and sheriff’s deputies.
Nearby, in Farmington, voters have yet to consider a $6.5 million budget proposal approved by selectmen in January or how they will vote on it. The town’s March 30 town meeting was delayed because of COVID-19 physical distancing constraints.
Farmington Selectman and state Rep. Scott Landry said the town’s elected leaders were considering how to proceed during a remote meeting Tuesday night.
Landry, a Democrat who represents Farmington and New Sharon in the Maine House, said many local officials hope Congress will provide additional funding or increased flexibility for existing funding, to help close anticipated budget shortfalls.
“We are all kind of anxious,” he said. “We don’t want to spend any more money or promise to spend any more money then we actually have.”
Farmington is working to rebuild its fire department, which was devastated by a propane gas explosion in September 2019 that left one firefighter dead and five others hospitalized for weeks.
Landry said local officials are bracing for reductions in state funding, as the pandemic truncates a tourism season that produces critical sales tax revenues that the state parcels out to cities and towns in the form of revenue sharing.
“We haven’t seen all the pieces of the puzzle yet, much less put them all together,” Landry said.
One of those pieces sits in Congress, which is again gridlocked over how federal funds should be used locally and whether additional help should be sent to states and municipalities. The relief funding approved so far by Congress can only be spent on coronavirus-related expenses, not to replace revenue losses as a result of the pandemic’s economic impact.
Sen. Angus King said the issue is his top priority in Washington, D.C. King, an independent who caucuses with Democrats, said a bill already passed by the House would provide additional funds to municipalities, but it is being blocked in the Senate.
Both King and Sen. Susan Collins, a Republican, have backed different bills that send another $500 billion to states and municipal governments.
King, a former governor, points out that if education funding is included, about one third of the state’s total budget goes to local government.
“So to provide aid to the states, but to say you can’t use it for revenue losses caused by COVID – that’s ridiculous, there’s no justification for it and it’s really harming the states,” King said.
Collins, who is backing a bill that sends $500 billion to states, and another $2 billion to Maine, said during a Senate floor speech in May that not helping local governments further would only exacerbate unemployment and further damage the economy.
“One in six Mainers is employed in the public sector,” Collins said. “Maine communities tell me that they will have no choice but to either increase property taxes at the worst possible time for working families or eliminate first responder jobs and slash education funding if they do not receive help.”
Both of Maine’s U.S. House members also have backed increased flexibility in use of federal COVID-19 relief funds as well as additional support.
Some states and municipalities have begun to borrow money to cover COVID-19 related revenue losses, according to a new report from the Pew Charitable Foundation. Some, like Illinois, are doing so in anticipation of additional federal help that would be used to pay off those loans.
And while Maine has already received $1.25 billion in federal aid for COVID-19 related expenses, a plan for how some of that money might trickle down to local governments remains unclear.
Maine Gov. Janet Mills, a Democrat, announced this week some of those funds, $13 million, were being earmarked for municipalities and their costs related to responding to the COVID-19 pandemic. The announcement comes following recent pressure from a coalition of Maine mayors who have been urging Mills to share the revenue the way governors in other states, including New Hampshire, have. Mills said the state needs additional guidance from the federal government or greater flexibility in the federal law’s requirements for using the money.
Eric Conrad, the communications director for the Maine Municipal Association, said different towns are taking different approaches to handling budgets and town meeting votes.
“There have been numerous towns with no increases,” Conrad said. “Yet, some have approved increases. Others are trying to wait a few months to get as clear a picture of revenues as they can.”
But Conrad said town officials are all watching budgets more carefully in anticipation of more financial woe to come.
“The one thing in common is that most all of our towns and cities are bracing for a rocky revenue year in (fiscal year) 2020-21,” Conrad said. “Everyone knows state income and sales tax took a hit during March, April and May, and perhaps still are. Our members know that if the state cuts its outlays, municipalities and schools could be affected.”
The municipal association also is hoping for additional federal help.
“A wild card is whether Congress will approve one more stimulus payment to help local and state governments, seeing that they are required to balance their budgets, while the U.S. government is not,” Conrad said.
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