Biennial Budget

New budget mandates will force property tax increases on hardworking Mainers

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A few weeks ago, my radio address focused on the unsustainability of the biennial budget proposed by Governor Mills.

Since my last address, Governor Mills has spent $10.5 million out of the Budget Stabilization Fund, or as I like to refer to it as the savings account, with another $3.5 million transfer on the horizon. These transfers are to fill holes in the Maine Department of Health and Human Service’s budget, created by the decertification of Riverview Psychiatric Center, this in spite of a large budget surplus in the State’s checking account that could easily cover these shortfalls.

In the meantime, revenue projections have started a downward trend, potentially putting the Mills budget even further under water before negotiations within the Legislature even begin.

What we do know at this point is that Mills’ budget proposal falls at least $5 million short of balancing and it relies on a number of one-time funding sources. As my good friend Representative Amy Arata pointed out in last week’s radio address, her budget spends 99.995 percent of all available funds, leaving a cushion of just one nickel for every $1,000 in spending.

While the budget technically doesn’t increase taxes directly, it sets property tax payers up for massive tax hikes at the local level to cover an underfunded mandate to increase the statewide minimum teacher salary from $30,000 to $40,000 next year. This salary bump does not account for the benefits packages that have already been agreed upon between school districts and teachers’ unions and it will disproportionately harm property tax rates in rural Maine.

To fund this increase, Mills’ budget will put an additional $10 million into the funding formula for one year only. This additional money will only apply to the state’s share of salaries that are currently less than $40,000, and it will come nowhere near covering the cost.

I have taken the time to reach out to my area school districts, and the outlook for property tax payers is bleak. Pumping an additional $10 million into the funding formula to be shared across the state’s 174 school districts is hardly enough to relieve the pressure on land owners.

One school district in my area will require an additional $1.4 million in funds from property tax payers next year. Of the four districts that I spoke with, the total additional cost from this underfunded mandate will be just over $3 million dollars next year.

Republicans and Democrats alike agree that teachers are an invaluable resource and should be compensated accordingly, but if the state wants to prioritize increasing the minimum teacher salary, the state should find a way to pay for it. Pushing this additional cost to the local level can only mean higher mil rates and an increased tax burden at the local level.

About Jim Hamper

Senator James Hamper is currently serving his fourth term in the Maine State Senate. He serves the people of Senate District 19.

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