(from Maine Townsman, July 2005)
By Kate Dufour, Legislative Advocate, MMA
As a result of MMA's role in successfully convincing a majority of Maine voters to support the School Finance and Tax Reform Act of 2003 (Question 1A) in the June 2004 election, and the financial pressure the voters' directive put on the Legislature, there might have been some friction this legislative session between MMA and the Question 1A opponents, which included the Baldacci Administration and the Legislature.
On the municipal side, there was considerable disappointment with the Legislature's approach to the implementation of Question 1A, with the adoption of the legislative version of Question 1A which was called "LD 1." The disappointment was exacerbated by overblown political assessments of the extent of the property tax relief that the Legislature's "LD 1" could provide when the tax bills go out this summer and fall.
Despite both the friction and the disappointment, the towns and cities were treated fairly by the 122nd Legislature with respect to the general municipal legislation that was enacted this legislative session.
The MMA Legislative Policy Committee's (LPC) 2005-2006 legislative platform consists of eight bills ranging from simple housekeeping measures to proposals instituting significant policy changes. The LPC agenda includes:
LD 70, An Act to Amend the Laws Governing the Funding of State Special Elections, requiring the state to reimburse municipalities for the cost of holding a statewide special election;
LD 358, An Act to Limit Property Tax Abatement for Reasons of Poverty or Infirmity to Applicants' Residential Property, clarifying that a person qualifies for a "poverty abatement" only for that person's primary residential property;
LD 371, An Act to Distribute Revenue in the Law Enforcement Agency Reimbursement Fund to Municipalities and Counties, ensuring that all of the traffic infraction fine revenue dedicated for the purpose of reimbursing municipalities and counties is actually allocated to those entities;
LD 473, An Act to Increase Vital Records Fees, increasing the fee paid to a municipality for providing copies of certified birth, marriage or death certificates in order to achieve closer parity with parallel state-imposed fees;
LD 696, An Act to Amend the Requirements for Publishing Municipal Legal Notices, providing municipalities more choice and flexibility in the publication of legal notices, by allowing qualifying municipalities to exclusively use newspapers mailed in bulk, such as advertising shoppers, for publishing legal notice;
LD 1377, An Act Regarding Municipally Owned Street Lighting, allowing municipalities to place and maintain municipally-owned streetlights on existing utility poles; and
LD (no number), An Act to Exclude Land from Property Tax Exemption for Certain Organizations, excluding land values from the property tax exemption provided to certain non-governmental organizations.
The LPC also gave initial approval to an eighth plank in its advocacy platform, but subsequently reconsidered that decision and elected to conduct more study on the subject. That bill was:
LD 249, An Act to Amend the Calculation for Annual County Tax Assessment, requiring county commissioners to assess the cost of rural patrol services on the basis of use rather than municipal valuation.
As a whole, the LPC's agenda was treated positively by the Legislature. Of the seven bills that were actually printed, two bills (LDs 358 and 473) were enacted this session and three (LDs 70, 371 and 1377) will receive the benefit of further deliberation when the Legislature reconvenes in 2006. Although two of MMA's bills were defeated, the submission of LD 696 created the catalyst for a positive change within the newspaper industry regarding the publication of municipal legal notices. The concept in the MMA sponsored rural patrol bill (LD 249, which was killed by the State and Local Government Committee) was kept alive by the decision of the same committee to carry over a similar bill, LD 925.
MMA Bills Enacted
LD 358, An Act to Limit Property Tax Abatement for Reasons of Poverty of Infirmity to Applicants' Residential Property. As enacted by PL 2005, c. 169, this Act clarifies that a person qualifies for a "poverty abatement" only for that person's primary residential property and not any commercial property. In a case decided in 2004, Hustus v. Town of Medway, Maine's Supreme Judicial Court determined that the state law governing eligibility for a property tax abatement for reasons of poverty did not prevent the issuance of a tax abatement to the owner of commercial property. This Act addresses that ambiguity in the law.
LD 473, An Act to Increase Vital Records Fees. As enacted by PL 2005, c. 112, this Act increases the fee paid to a municipality for providing a copy of a certified birth, marriage or death certificate from $7 to $10 for the first copy and from $3 to $5 for each additional copy. The Act also increases the burial permit fee from $4 to $5. The changes made to the fees charged by municipalities are now more equitable with the fees charged by the state for the same records. Currently, the fee paid to the state for providing a copy of a certified birth, marriage or death certificate is $15 for the first copy and $6 for each additional copy.
MMA Bills Carried Over
LD 70, An Act to Amend the Laws Governing the Funding of State Special Elections. As amended by the Committee, this bill would require the state to reimburse municipalities for the direct costs the municipalities incur to hold a statewide "special election." As defined in the amendment, a special election is a statewide election scheduled by the state for any time other than the annual November general election or the June primary election held in even-numbered years. The reimbursement to each municipality would be calculated on the basis of the municipality's population with reimbursement rates ranging from 95 cents per resident for the smallest municipalities to 25 cents per resident for the largest municipalities, to capture the economy of scale pertaining to actual election costs.
Although under certain circumstances this bill could increase costs to the state, that additional state expenditure could be avoided by the Legislature in one of two ways. First, the Legislature has the discretion to schedule any special election, such as a bond referendum, during a regularly scheduled June or November election, thus avoiding additional state costs. Second, the Legislature by a two-thirds vote of the House and Senate could vote not to fund the municipal cost of a specially scheduled statewide election. It is estimated that if enacted, LD 70 could relieve municipalities of the estimated $447,000 it costs to conduct statewide special elections at the local level.
LD 371, An Act to Distribute Revenue in the Law Enforcement Agency Reimbursement Fund to Municipalities and Counties. The purpose of the bill is to ensure that the portion (6%) of the fine revenue currently collected for traffic infractions required to be reimbursed to municipalities and counties for participating in the prosecution of a motor vehicle infraction is actually distributed to municipalities and counties. Currently, any balance in the fund at the end of the fiscal year is transferred to the state's General Fund.
As amended by the Committee, this bill would distribute the unused revenue in the Law Enforcement Agency Reimbursement Fund at the end of each fiscal year in two ways: 1) 10% of the unused revenue would be distributed to the Law Enforcement Benevolent Fund for the purpose of providing financial assistance to law enforcement officers injured in the line of duty and to cover uninsured medical expenses of law enforcement officers and members of their immediate families who suffer from non work-related illnesses or injuries; and 2) the remaining balance would be distributed among the municipalities that provide direct law enforcement services on population-based formula and among the counties on the basis of the populations of municipalities that do not provide direct law enforcement services. The FY 06-07 fiscal impact of LD 371 is $1.2 million.
Both LD 70 (special election funding) and LD 371 (court reimbursement) received initial support from the House and Senate and were subsequently sent to the Appropriations table because it was determined that the bills would require additional state funding. As the Legislature's time clock rapidly moved toward adjournment, the Appropriations Committee met in the last day of the session to process the 120 bills sent to the Appropriations table. In response to the time crunch, the Committee made a decision to carry over all of the bills that would require additional state funds and to move toward final enactment those bills that did not have a fiscal impact on the state's General Fund. The Appropriations Committee voted to carry over LD 70 even though it had a fiscal note of $0.
LD 1377, An Act Regarding Municipally Owned Street Lighting, was the third bill on the LPC legislative platform to be carried cover. This bill would allow municipalities to install and maintain streetlights on existing utility poles and to purchase only the energy from utility companies. The bill also limits the ability of the electrical company to impose standards or require code compliance with respect to municipally owned streetlights that exceed the standards or codes that would apply to the utility. The bill was carried over at the request of MMA and other interested parties to provide the time necessary to address the issues and concerns raised with the printed bill.
MMA Bills Failing Passage
Included as part of the LPC's legislative platform was LD 249, An Act to Amend the Calculation for Annual County Tax Assessments. The bill would have required the county commissioners to calculate the budgeted cost of non-contracted rural sheriff patrol services separately from the total county assessment. The cost of the rural patrol service would be assessed on the basis of use rather than on the basis of municipal valuation.
Although the LPC initially supported including LD 249 in its legislative agenda, MMA received immediate feedback from the officials who were concerned about the LPC's decision. In response to that feedback, the LPC voted to create the Service Center/Rural Community Working Group and directed the Working Group to take a more in-depth look at the issues of appropriately funding regional-based public safety services and the property tax rate disparity between service center communities and other municipalities.
In deference to the charge to the Working Group, the LPC directed MMA staff to take a "neither for nor against" stand on LD 249 and to request that the Legislature's State and Local Government Committee carry over the bill to provide the MMA Working Group an opportunity to address the issues. In response to the request for time, the State and Local Government Committee voted "ought not to pass" on the LD 249 and voted instead to carry over a similar bill, LD 925, An Act to Fairly Apportion the Cost of Sheriff Patrol Services, drafted on behalf of the Service Center Coalition, as the vehicle to address the issue next session.
LD 696, An Act to Amend the Requirements for Publishing Municipal Legal Notices. MMA's alternative legal notice bill made its perennial bid for enactment and like several of the other bills that are introduced every legislative session (including public construction contract retainage, concealed weapon permitting changes and the abolishment of the State Planning Office) failed enactment. As proposed by the LPC, the bill would have provided municipalities more choice and flexibility in the publication of legal notices. Current law requires municipalities to post legal notices in newspapers that are mailed second class (i.e., Portland Press Herald, Bangor Daily News, etc.), which prevents municipalities from exclusively using newspapers mailed in bulk, such as advertising shoppers, for providing public notice.
Although the bill barely limped out of the State and Local Government Committee and was killed by the entire Legislature, there was a positive outcome. In response to this year's attempt to change the publication law, Maine's daily newspapers adopted new publication rates for municipal legal notices. Although the new rates vary from newspaper to newspaper, each provides discounted rates for the publication of municipal legal notices of up to 50% in communities where subscription rates to their newspapers are less than 25% to 30% depending on the policy adopted by the newspaper.
MMA Bill that Never Was
In addition to the seven bills outlined above, the original LPC legislative platform included an eighth bill seeking to alleviate the burden that property tax exemptions given to some property owners place on all other property taxpayers. The bill drafted by the LPC would have simply excluded land values from the property tax exemptions provided to certain non-governmental organizations.
Although a legislative sponsor submitted a draft bill to the Revisor's Office, the bill was never printed or submitted to the Legislature for review. Since the second legislative session is reserved for emergency bills, it is likely that the municipal community will have to wait until 2007 to resubmit legislation regarding property tax exemptions.
A special municipal thanks is owed to the Legislators who agreed to sponsor the MMA bills, including Representatives Richard Brown of South Berwick (LD 70); Christopher Barstow of Gorham (LD 249); Ken Fletcher of Winslow (LD 358) and Sarah Lewin of Eliot (LD 473) and Senators Christine Savage of Knox County (LD 371); Richard Nass of York County (LD 696) and Chandler Woodcock of Franklin County (LD 1377). Whether the bills passed, failed or were carried over, MMA greatly appreciates the efforts of these legislators to get the municipal agenda before the Legislature.
As provided by Maine's Constitution (Article IX, section 21), the Legislature is prohibited from requiring municipalities to expend additional resources to modify or expand its activities unless the Legislature accomplishes one of two requirements: 1) pay for 90% of the costs of the new or expanded activity; or 2) vote by a two-thirds majority in both the House and the Senate to shift the additional expenditures to municipalities without paying for the increased costs. The second option is accomplished by adding a mandate preamble to the bill stating that intent.
In cases where the Legislature enacts a mandate, but both fails to appropriate 90% of the funds necessary to implement the mandate and garner a two-thirds majority vote to override the state's funding obligation, the mandates enacted by the Legislature become voluntary (see 30-A M.R.S.A. §5685 (4)). Municipalities may choose to perform these unfunded mandates, but they are not legally obligated to do so. The enactment of voluntary mandates is nothing new for the Legislature. One of the most significant and costly "voluntary" mandates shifted to municipalities was the enactment of LD 1577 in 2003. This law (PL 2003, c. 477), requires schools districts to implement and fund the Gifted and Talented program.
Of the 144 municipally-related bills enacted by the Legislature, only six mandate that municipalities expend additional resources to provide new services or tasks. One of those newly enacted mandates, LD 1626, Resolve, Regarding the Town of Cooper, is merely a one-time administrative mandate. As enacted, LD 1626 requires the town of Cooper to find alternative solutions to deorganization. Of the remaining five mandate bills, two are real mandates that will create increased additional municipal costs, and three of the bills were enacted without the mandate preamble or funding. These bills are described in more detail below.
In addition to enacting only two "real" mandates, the Legislature also enacted a mandate study bill strongly supported by municipal officials. As enacted, LD 1359, Resolve Directing the Intergovernmental Advisory Group (IAG) to Review Unfunded Mandates, directs what is now called the Intergovernmental Advisory Commission (IAC) to conduct a review of the unfunded state mandates that were enacted prior to November 1992 and to submit legislation repealing or amending any of the identified mandates. (November 1992 was chosen as the end point of the study because it was in that year the amendment to Maine's constitution regarding mandates became effective.) LD 1359 will provide municipal officials the opportunity to engage in conversations with interested parties and address some of the most burdensome mandates placed on municipalities.
Mandates Enacted with Preambles
LD 564, An Act to Amend the Laws Governing the Student Code of Conduct. As enacted by PL 2005, c. 307, this Act requires school boards to establish policies that will be developed by the Children's Cabinet to address bullying, harassment and sexual harassment. The fiscal impact this mandate will have on municipalities is at this time unknown. The decisions made by the Children's Cabinet in the creation of these policies will determine how costly the implementation of the policies will be on school districts.
LD 1115, An Act to Facilitate Voting by Participants in the Address Confidentiality Program. As enacted in PL 2005, c. 364, this Act requires the municipal clerk to automatically mail an absentee ballot for every election to registered voters enrolled in the Secretary of State's Address Confidentiality Program. The Address Confidentiality Program helps residents who are victims of domestic violence, sexual assault or stalking by providing a designated address to victims who have moved to a new location unknown to their abuser. Mail is forwarded from the designated address to the residence of the participant through a free first-class confidential mail forwarding service. Since the number of persons enrolled in the Address Confidentiality Program determines how burdensome this requirement will be on municipal election officials, at this time the fiscal impact of this mandate on municipalities is minor. Currently, there are less than thirty people enrolled in this program.
Mandates without Funding or Preambles - Voluntary Participation
LD 623, An Act to Ensure Participation by Voters with Disabilities in the Electoral Process. As enacted by PL 2005, c. 196, this Act creates "alternative registration signature statement" program allowing disabled voters to authorize any other registered Maine voter to sign a candidate's petition on behalf of the voter, provided that the signer is not the candidate for office, the disable voter's employer or labor union agent. If the voter does not have access to another voter to assist with the application for the "alternative registration signature statement," the municipal registrar is required to provide that assistance, including making a home visit if necessary.
LD 1161, An Act to Provide for Variance Notification in the Shoreland Zoning Law. As enacted in PL 2005, c. 440, this Act would require municipalities to forward to the Commissioner of the Department of Protection any information relating to a request for a variance from a shoreland zoning ordinance at least 20 days before the municipality's Board of Appeals acts on the request.
LD 1268, An Act to Amend the Law on Junkyards, Automobile Graveyards and Automobile Recycling Businesses. As enacted in PL 2005, c. 424, this Act makes several corrections and adjustments to the laws governing the licensing of junkyards, automobile graveyards and automobile recycling businesses. The one element of the Act that triggers the "mandate" designation is a requirement that municipalities provide notice to the Secretary of State of a public hearing on the revocation or suspension of a license, a relatively rare occurrence.
Mandate Confusion with Labor Issues
Although the Legislature enacted several labor bills that will shift additional costs onto municipalities (see descriptions in the New Laws section), the rule of "general applicability" often prevents the mandate issue from being triggered with this type of legislation. With respect to most labor bills, the change in law impacts all employers, not just municipalities. If a bill impacts an entire class (i.e., all Maine employers) and not an individual sector (i.e., municipal employers), the bill is not considered a municipal mandate under the rule of general applicability. In order for the mandate issue to be triggered, the action of the Legislature must be primarily directed at local government.
However, there was one Labor Committee bill enacted this session, LD 1123, An Act to Promote Stability in Labor Relations, that should have been identified as a mandate. As enacted, LD 1123 expands the entitlement for municipal, county, university and judicial branch employees to "grieve" management decisions including job classification decisions, overtime scheduling assignments, allegations regarding the working conditions, claims of hostile work environment, etc. Prior to the enactment of this bill, these employees could grieve only the disciplinary aspects of an expired contract unless the labor contract provides otherwise.
On the basis of a weak "prospective" impact argument, the Office of Fiscal and Program Review (OFPR), the state agency responsible for identifying mandates, determined that LD 1123 did not constitute a mandate. Although the bill did not impact all employers, it did put the impacted employers on notice that employees would be provided additional opportunities to grieve elements of expired contracts in the future.
MMA disagrees with the determination of OFPR. LD 1123 clearly modifies the activities of schools, counties and municipal employers. Many of them who have not waived their rights under current law to limit grievable actions when labor contracts expire will now have to engage in new grievance procedures with the attendant costs in each case of administrative time, down time, possible arbitrator costs, etc. The OFPR argument that these new costs can be negotiated in new contracts misses the point. Of course the new employee right can be negotiated, by increasing the costs of the contract. Converting the direct new costs triggered by LD 1123 into increased contract costs doesn't make the increased costs go away.