Governor’s proposed budget strikes fear into SAD 4 area school and municipal leaders

By Bill Pearson

Observer photo/Bill Pearson     BUDGET SUMMIT — SAD 4 Superintendent Paul Stearns explains how Governor LePage’s proposed biennial budget would impact next year’s school budget. Stearns and Guilford Town Manager Tom Goulette gave an overview of how the governor’s $6.2 billion budget would impact the local communities. The two local leaders were also joined by State Rep. Paul Davis (left), State Rep. Pete Johnson, center, and State Senator Doug Thomas who gave their perspective as legislators on the budget.

Staff Writer

    GUILFORD — Governor Paul LePage’s plan to fill the gaps in his proposed $6.2 billion biennial budget has school and municipal leaders from Gray-New Gloucester to Guilford panic stricken. Local municipal officials believe the Governor’s plan to balance the state budget is too dependent on reducing aid and revenue sharing with the state’s municipalities.

    Facing a projected $880 million revenue shortfall, LePage plans on closing the budget gap by eliminating municipal revenue sharing for the next two years. This would save the state $98.9 million each year. His proposal also calls for the state taking a larger share of excise tax revenues. The proposal would also eliminate the Homestead property tax exemption and circuit breaker program for all residents excluding veterans and people over age 65.
    The Governor’s budget proposal has received criticism from friends and foes alike. State legislative Democratic leaders described the plan as a “$400 million tax shift to the local property tax payers.” And SAD 4 Superintendent of Schools Paul Stearns and Guilford Town Manager Tom Goulette, who described themselves as “fiscal conservatives,”, had grave concerns about LePage’s plan.
    They explained how the governor’s proposal would impact the local community during a March 27 informational meeting. Stearns gave an overview how the changes would impact SAD 4. While Goulette explained how the district’s six municipal budgets would be affected. The town officials were joined by State Representatives Paul Davis (R-Sangerville) and Pete Johnson (R-Greenville) along with State Senator Doug Thomas (R-Somerset) who gave their perspective on the 2014-15 biennial budget.
    Both Stearns and Goulette believe the governor’s proposal spells doom for small municipalities and school districts which received a large portion of their funding from the state. Stearns reported even before the Governor unveiled his plan, the district was expected to receive fewer state dollars. The district is already scheduled to receive $147,807 less from the state’s Essential Program and Services formula.
    “Even though our town’s valuations and student enrollment is unchanged, we are still going to receive less state money,” Stearns said. “The state’s valuation has gone down which results in us receiving less money as well other minor changes in the formula caused the reduction.”
    Stearns believes LePage has set the wrong priorities in his proposal. He described several areas where the Governor proposed to spend money which would be detrimental to public education. Those areas included funding $1 million for a legal defense fund for the state’s two charter schools. Stearns countered that SAD 4 had a defense fund with $8,000.
    The Governor also wants to shift the anticipated $13 million generated from the Oxford Casino from the educational fund to a “special revenue” fund. Stearns wants those monies to remain earmarked for education. Stearns was also critical of proposed changes to the Maine Teachers’ Retirement Fund. LePage has proposed to require local districts to assume half of the cost. SAD 4’s portion would cost local taxpayers an additional $94,000 per year.
    Stearns also had concerns about the Governor’s continued support of school choice which he believed would undermine local education. He reasoned that when a student left his or her home district, the state funding went to the other school system.
    “We are a mil in the hole and the budget committee hasn’t even met yet,” Stearns said. “It looks like the district taxpayers are going to have to raise $235,452 more locally to receive less money from the state.”
    Stearns indicated when the SAD 4 budget committee met on March 25, he would propose a 2.97 percent budget increase. His budget proposal would also include several recommendations to reduce staff.
    Goulette also painted a bleak picture for local towns under LePage’s budget. The Governor’s plan to reduce municipal aid would result in a $460,000 loss in state subsidies collectively to the six SAD 4 towns. He indicated the plan was a flawed approach because it wasn’t balanced. It hit mill towns especially hard due to the proposed elimination of Business Equipment Tax Exemption (BETE) and Business Equipment Tax Reimbursement (BETR) programs.
    Goulette described himself as a Republican and a conservative, but he indicated that he couldn’t support LePage’s plan.
    “I’m not so party-bound, even though I’ve been a Republican forever, that I wouldn’t take a shot at anybody if I thought they were wrong,” Goulette said.
    The Guilford town manager explained the Homestead Exemption loss alone would mean his town’s  property tax payers would each be paying an additional $140 next year.
    The legislative delegation indicated that they also had concerns about several areas of the proposed budget. Rep. Johnson, who is a member of the Education Committee, told the officials that he expects to see a much different proposal when its voted on.
    Rep. Davis reminded the audience this wasn’t the first time the state and towns had encountered difficult economic times..
    “Just remember, the governor proposes and the legislature disposes,” Davis said.
    Rep. Davis believes that there are several areas in state government which could be reduced prior to considering reducing municipal aid and revenue sharing.