Mayor Michael Brennan of Portland

By Carol McCracken  (Post # 1,420)

Today, the Mayor’s Coalition, sent a three page letter to Governor LePage offering three alternative suggestions to the pending budget proposal.  The Coalition’s letter was in response to a letter from Governor LePage, dated April 25, requesting “serious ideas” to offset his $200 million cut to muicipalities for the 2014 budget which begins on July 1st.  Most of the letters the Governor receives state he made the wrong choice in that decision.  However, the letter goes on to say no one has suggested other cuts that should be made at the state level to offset that $200 million.  “It is easy to find fault and hard to find solutions,” the Governor wrote.

The Mayors’ Coalition made three recommendations:

1. Suspend the pending income tax cuts.  This would raise $350 million which could be used to reinstate municipal revenue sharing at its current level, preserve the existing Homestead and c ircuit Breaker property tax relief programs, retain the vehicle excise tax for municipalities, maintain the state’s commitment to teacher retirement and provide additional support for K-12 education.  The proposal would spend the inome tax cuts passed during the last two  years until the state’s economy has fully recovered from the Great Recession.

2. Sales Tax Increase and Expansion.  This option would fund the same improvements to the budget as Option 1 by temporarily raising the sales tax from 5 to 6%, raising the lodging tax to 10% and modestly expanding the sales tax.

3. Tax Reform.  The Mayors supports comprehensive tax reform to balance the state’s reliance on the 3 major revenue sources – sales, income and property taxes.  The pending tax reform legislation, LD 1496, is a credible proposal to accomplish that goal.

The last day  the State Legislature meets  is around June 18th.

The bi-partisan Mayors’ Coalition was formed to support state policies that will grow Maine’s economy and to oppose policies that will shift costs to Maine municipalties.