On the Issues
(from Maine Townsman, August/September 2010)
Cuts to Municipal Revenue Sharing
Libby Mitchell
“We, collectively, have to look at how we spend the money.”
“It is ‘revenue sharing.’ When the state gets into trouble, we’re all in trouble.”
Sen. Mitchell acknowledged the Legislature has, at times, overlooked how strong local identities are in Maine. School consolidation, she said, was a recent example of that. But, she said, citizens are not confident in all state and municipal spending taken as a whole. They may be confident in their town’s spending, but not overall.
Paul LePage
The mayor tied revenue-sharing reductions to poor spending decisions made at the state level.
“My goal in Augusta is to reform education, to bring it to at least the national average in spending.”
He said reforming spending at the state Education and Health & Human Services departments will “allow a return to revenue sharing the way we’re used to it.”
“I don’t believe there’s a shortage of money. I think there’s a lack of priorities in spending.”
Eliot Cutler
“I pledge not to raid municipal revenue sharing. I won’t do it.”
Mr. Cutler talked about forging a state-local “partnership” so that revenues and resources are seen in the bigger picture.
“Part of my job as governor is going to be making state government as effective and efficient as most local governments are in the state of Maine.”
Shawn Moody
Mr. Moody addressed this question by comparing municipalities to small businesses.
“I view all the towns in Maine as small businesses. We all know what small business is: It’s nimble, it’s quick and you can get things done.”
“I’m a big proponent of local control. If something doesn’t go right, you’re going to hear about it at the coffee shop the next day. And, you can adjust it within 30 to 60 days instead of three to six years.”
Kevin Scott
“The process of shifting (obligations) is not a solution, it’s not helping folks out, and towns are overburdened.”
“I will be a strong advocate for looking at an innovative approach, putting our collective heads together, and including the folks who are most impacted.”
55 percent State Subsidy of K-12 Education
Libby Mitchell
“It’s not 55 percent of your local (education) budget, and many people think that it is. It’s 55 percent of the whole cost of education.”
“Yes, we need to work toward that goal. I’m not in favor of repealing that.”
Sen. Mitchell said pushing for the 55 percent subsidy now threatens municipal revenue sharing even further.
Paul LePage
“I believe 55 percent is adequate but I will tell you that, as the governor, 55 percent will be earmarked and will be concentrated to the classrooms.”
“I think the law was to educate children … It was not intended to have a 500 percent variance between school districts and how you qualify children for special education. I will be tough on administration and special education.”
Eliot Cutler
“The goals of education in the state of Maine need to be quality, cost-effective performance and equity.”
“We are, I believe, at 42 percent of our (K-12) commitment and we’re heading below 40 percent, to be blunt.”
Shawn Moody
Mr. Moody said 55 percent funding is too high. He suggested taking the average state subsidy over the past five years and adding “a percent or two” to that. “To me, that is a realistic goal. Fifty-five percent is not realistic.”
“When you set an unrealistic goal you can almost dispirit an organization.”
Kevin Scott
Mr. Scott estimated the state is subsidizing K-12 education at about 43 percent. “Forty-three percent does not equal 55 percent so, in my mind, we need to look at where our priorities are in government.”
“We’re going to have to find a way to meet these obligations.”
Unfunded Mandates Pushed onto Municipalities
Libby Mitchell
“I would not avoid public policies that I think are good but I would like to work with you in terms of what the real costs are and make sure I’m not passing costs on.”
“I don’t want municipal leaders to feel that they are not equal partners at the table. That doesn’t mean we will always agree.”
Paul LePage
“Unfunded mandates that cross my desk (as governor) will go right into the trash can.”
“I’ve been a mayor now for six years and a councilor for four years. Unfunded mandates are devastating and I can pledge, not only to the Maine Municipal Association but to the citizens of Maine, that unfunded mandates will never make it across my desk. Period.”
Eliot Cutler
“To create unfunded mandates, and then to take away municipal revenue sharing and not provide the money to complete the specific tasks mandated by the directives, is irresponsible.”
“There is a sense, I think, from everyone I speak with in the state, that we’ve got to start doing things very, very differently.”
Shawn Moody
“I would advocate that if the state feels strongly enough about a certain issue or initiative, they fund that initiative adequately. I would be very much a proponent to stick with funded mandates. Do I have to say I approve of mandates in general?”
“The social fabric of Maine is the local community. We’ve got to protect that, preserve that style, type of government.”
Kevin Scott
“Unfunded mandates from the national level to the state level down to the local level are unacceptable. It doesn’t make sense to me one bit.”
Financing the Transportation System
Libby Mitchell
“There was discussion about raising gas taxes (during the last Legislative session) and you know how that was met.”
“We need more money (for roads). All states are going through this. What is the best way to do this? Is it raising the gas tax or is that just a race to the bottom” because fuel efficiency keeps climbing?
“I did support bonding (for roads), do support bonding, would have been in favor of a bigger bond. But I couldn’t get it passed… Not borrowing for the sake of borrowing, but borrowing responsibly.”
Paul LePage
“I will not indebt the state any further, beyond its ability to pay. I will not raise taxes to pay for roads.”
Mayor LePage said Waterville has worked with Colby College and the state to handle some of its roads through a public-private partnership. “Any opportunity we have to do that (at the state level), I will do that.”
“I think the Department of Transportation needs to develop a new formula on how it approaches roads. A lot of roads now being done by the state can be done by the private sector.”
Eliot Cutler
“The state has a terrible time coming up with $35 million for roads. At the same time, there is about a $3.8 million backlog – an unfunded liability, if you will – to repair roads and bridges throughout the state.”
“I think, No. 1, we have to take a look at raising the gasoline tax. It’s either that or a VMT (Vehicle Miles Traveled) charge, or something.”
Shawn Moody
“(Transportation) needs to be a priority and the consensus is it’s not right now.”
“Maine estimates a $250 million shortfall right now to get our (transportation) infrastructure up to par.”
“It really revolves around driving private enterprise business practices – the business model – into state government.”
Kevin Scott
Mr. Scott suggested there may be ways to build better roads, ones that last longer, and Maine should get involved in that pursuit. Research like this is probably happening, he said.
“These are the things that people in Maine aren’t always aware of – what good things are happening.”
Economic Development and the Business Climate
Libby Mitchell
“This is the question that we’ll all be talking about” during the campaign.
“I was very, very impressed with the success I saw in Lewiston-Auburn. Nobody made them but they decided they wanted to work together. What a wonderful role model.”
“It might sound far-fetched but it’s my opinion that education is also at the heart of this.”
Paul LePage
“I’ve been in business for 40 years and I’ve spent most of my business life in the State of Maine, either in the pulp and paper industry, consulting and now the retail industry… As far back as I can remember, I believe the state of Maine to be very adversarial to business.”
“Every time the state needs new revenue, the Legislature looks to put it on the business sector. The problem with that is that wealth goes where it’s welcomed and stays where it’s appreciated.”
Eliot Cutler
“We have to cut the cost of living and doing business in the state of Maine.”
Mr. Cutler said high energy and health-care costs, and a low value of state services compared to what they cost, discourage business investment in Maine.
“We have to tear down what I call the ‘wall of no.’ There is a perception, which is reinforced by the way we deal with issues in Maine,” that this is a difficult state in which to run a business.
Shawn Moody
“Businesses look at the regulatory environment, tax environment, leadership” when deciding where to invest.
Mr. Moody said his collision-repair centers have gone through the regulatory systems in five Maine municipalities. Each time, he said, it would be nice at the end of the process for a municipal leader to say: “ ‘Welcome to ______. Thanks for doing business here.’ Not hearing that, you go home a 10 o’clock at night, or whenever it is, and say, ‘Wow.’”
Kevin Scott
“There is one way to attract businesses to Maine and that is to make certain the existing Maine businesses have the best possible environment to grow their businesses and hire employees.”
“I often quoted Albert Einstein when I was out in the springtime talking to Chambers… Any intelligent person can make a system more complex and difficult to manage. It takes a touch of genius and a lot of courage to move in that opposite direction. Let’s move in the opposite direction.”
Tax Reform
Libby Mitchell
“I fought for, and helped get through the Senate, a tax-reform package. The minus is the voters rejected it. That doesn’t mean the problem has gone away. That means we have to continue to look at modernizing the code.”
“The sales tax base is very narrow and very volatile. That means in a recession, people stop buying cars and refrigerators – and revenues fall.”
“I also think there’s a belief out there – and we have to work on it – that, ‘Yeah, I want it (government services), but I don’t have to pay for anything.’ ”
Paul LePage
Mayor LePage said he will “reduce the (state) income-tax rate from 8.5 percent to 5 percent but I do not believe you need to broaden the sales tax. I think what you need to do is lower state spending, become more efficient.”
Eliot Cutler
Mr. Cutler said the state foregoes $3.5 billion in revenue annually through myriad tax exemptions.
“We never revisit that, never re-evaluate it, never look to see if it’s working. You guys (on the local level) do it every single year and we’ve got to do it at the state level. Then we’ve got to have a statewide conversation about the tax structure.”
Shawn Moody
“We’ve got to broaden our tax base. I would look at doing that in an income-tax way and try to hold the line on property taxes because they’re borderline right now, especially for our elderly.’
“I’m not going to be that candidate who says, ‘We’re not going to raise taxes,’ because it’s irresponsible in times like we’re (going to) face.”
Kevin Scott
“My mission begins with reducing costs at the state level. Period. That’s priority No. 1.”
“In 2007, we had some reform that made a little bit more sense than the bill that came out of this last go-round.”
“We need to get away from the favoritism and more importantly the perception by the public that favorites are being played.”
Tax-Exempt Properties and Institutions
Libby Mitchell
“Nobody wants to take the hospitals on because they are community members.”
Sen. Mitchell said the state hopes municipal leaders tackle the issue; municipal leaders hope the state tackles it. “No one wants to be the bad guy.”
Paul LePage
Mayor LePage said Waterville is home to two tax-exempt colleges and two hospitals. “Our police department is called to the colleges far more often than it should be. Our Public Safety Department, in areas of our Fire Department, is called to the hospitals and nursing homes far more than (it) should be. We have a lot of resources that go up there. Is it a fair share? No, it’s not a fair share.”
He said questions about tax-exempt organizations “are very important” but he doesn’t have detailed answers at this point.
Eliot Cutler
Mr. Cutler said the state contracts with 7,000 non-profit entities. “Most of those organizations are not paying property taxes and I defy you to show me the difference between not-for-profit organization X and for-profit organization Y.”
The issue of tax exemptions is “a huge problem.”
Shawn Moody
“People should pay their fair share. We would take a hard look at” tax exemptions.
“Times were pretty good not that long ago and, at the state level, we spent as fast as came in. There’s got to be some fiscal foresight and some positive surplus built in” when economic times are good.
Kevin Scott
“I would definitely support a bill when we had exempted institutions coming to us and asking they can only be taxed this much.”
“We need to get to a point where these institutions understand that in the community the infrastructure, the demands on other taxpayers in the community, that these folks need to should some of the burden and help out.”