AUGUSTA, Maine — Maine municipalities on Tuesday responded to Gov. Paul LePage's invitation to come up with their own ideas to balance the state budget without suspending revenue sharing, listing a sales tax increase and delay of an income tax among their options.
In a letter to the governor, the bipartisan Mayors' Coalition representing a dozen Maine cities said the $6.3 billion, two-year budget proposed by LePage would result in significant property tax increases for Maine residents and businesses. The letter said the governor's proposed two-year suspension of revenue sharing, shifting of some vehicle excise taxes to the Highway Fund, reduction of the state's contribution toward teacher retirement and cutback in general assistance all reduce municipal revenues.
"We will continue to tighten our belts, but the Maine municipalities have already absorbed $40 million a year in revenue sharing cuts. The budget will result in significant property tax increases for Maine residents and businesses," says the letter.
LePage was not impressed with the cities' suggestions, releasing a statement that said, "The coalition proposed three options: raise taxes, raise taxes or raise taxes. How original."
The coalition's letter was sent in response to an invitation by the governor in April to come forward with ideas to ease the impact of his budget proposals, but he has also contended that municipal governments can make the needed cuts to their budgets.
"It is easy to find fault and hard to find solutions. I welcome any suggestions town officials have to cut elsewhere in the state budget, but it is time for everyone to set complaints aside and offer solutions," said a statement from LePage.
In their letter, the mayors suggest as the first option suspending income tax cuts that were enacted last session, which they said would avoid a $350 million drain on state revenues. The mayors say it's a revenue loss the state cannot afford now.
The coalition also suggests a temporary sales tax increase from 5 percent to 6 percent, combined with a lodging tax increase from 7 percent to 10 percent. In addition, they call for comprehensive tax reform to balance sales, income and property taxes.
Through Tuesday, nearly 8 percent of the state's municipalities and school districts have passed resolutions opposing LePage's budget.
In his response, LePage said the cities didn't address the real problem facing the state, which is out-of-control government spending.
"When I was mayor, I was able to reduce taxes without reducing services. I know that it can be done if local officials are willing to make the same difficult decisions I made as mayor," said LePage, who was mayor of Waterville before he was elected governor.