Tuesday, May 21, 2013
As government gets further from the local level, it gets more and more wasteful and free spending. This finding is based on my work at the local, county, state, and federal levels of government. I've seen and worked and lived it.
Gov. Paul LePage -- astonishingly -- doesn't seem to know this. His proposed two-year budget moves revenue from the local to the state level, leaving local governments reeling. He didn't even take the opportunity to remove state mandates that now drive much of the costs of local government, from education to waste disposal to land use planning and administration.
In the early 1980s, when I served as a Mount Vernon selectman, we spent $5,000 per year on the dump. Yes, we called it the dump in those days. We burned and buried the waste. Today, the town spends $150,000 per year on its transfer station. The waste is still buried, but in a different town.
While the governor seeks to solve his spending problem by punishing local governments and taxpayers, he's ignoring the possibility that the answers to many of the state's spending problems could be found in local people-driven government.
"Charting Maine's Future," an impressive report and set of recommendations prepared by the Brookings Institution for GrowSmart Maine in 2006, reported, "On balance, Maine's local spending on such services as police protection, parks and recreation, and libraries appears low in comparison to the nation, and in most cases is competitive with other rural states."
The report also noted that, "evidence ... suggests that Maine's local government system remains relatively cost-effective in most places for the provision of most non-education services."
While LePage seeks to remove more than $400 million of state revenue that is supposed to go to local governments, he should instead be sharing more of that revenue with the most efficient level of government in the state.
In fact, the people of Maine have demanded this for many years. In 2003 in a statewide referendum, we voted to require the governor and Legislature to pay at least 55 percent of the total costs of public education for kindergarten through grade 12, and 100 percent of the costs of special education services that are mandated by federal or state law.
Ahead of their time, voters also directed that 2 percent of the funds appropriated under this act would go to a new fund for distribution to schools and municipalities that demonstrate significant savings through collaborative efforts, regionalization or consolidation.
Finally, voters directed that 2 percent of the tax revenue deposited in the municipal revenue sharing account be distributed to municipalities that choose to save money be delivering services through regional cooperative efforts.
We've pretty much botched the latter two initiatives ever since and ignored the 55 percent requirement. And in the governor's new budget, he dumps even more education costs on local government -- including teachers' retirement funding.
For years, state government has been stealing revenue from local government -- from tire disposal fees paid at the point of purchase that were supposed to go back to the towns to pay for tire disposal, to snowmobile registration fees collected by town governments.
And that has left towns totally dependent on the very regressive property tax to pay almost all of their bills.
The Legislature recognized this problem when it enacted the homestead exemption, giving property owners a small break by decreasing their property valuations by $10,000, slightly shifting the property tax burden to nonresidents.
I am completely baffled by the governor's new proposal to take away the homestead exemption for homeowners under the age of 65.
Many studies over the years have recognized how out of whack our tax system is. The Brookings Institution found that "Maine's often-high costs of government and the unbalanced revenue system that supports them hinder the state's ability to promote sustainable prosperity."
Among other problems, Brookings noted Maine's "second-highest property taxes in the nation." While recognizing that our top tax rate is a serious problem, the report noted, "it will be imperative for leaders to address once and for all the tax code's extreme over-reliance on property taxes and its overly narrow sales-tax base."
Although the Legislature has tried to tackle these problems over the last few sessions -- particularly last session, when a bipartisan majority lowered the top tax rate and relieved 70,000 low-wage earners from having to pay income taxes, we're a long way from resolving these problems comprehensively -- and the governor's new budget moves things dramatically in the wrong direction.
All of this is very taxing, defined by Webster's Dictionary as "onerous, wearing."
George Smith is a writer and TV talk show host. He can be reached at 34 Blake Hill Road, Mount Vernon 04352, or firstname.lastname@example.org. Read more of Smith's writings at www.georgesmithmaine.com.