Local towns get their state revenue sharing estimates
As the Maine Legislature this spring considered Gov. Paul LePage’s proposal to suspend municipal revenue sharing in his proposed bienniel budget, local towns were placed in the position of guessing what might happen and factoring that uncertainty into their own budgets.
Some figured on getting nothing, while others planned on the full amount but made other contingency plans.
Now that the Legislature has approved a budget, the towns are finding out how accurate their crystal-ball gazing has been.
By state law 5 percent of all sales tax revenue is distributed among Maine towns according to a formula that factors in tax burden and population.
In Bethel, Town Manager Jim Doar recommended to selectmen during spring budget-building that the town plan on receiving the full amount (an estimated $115,000) from the state. But he also recommended that they not use money from the town’s undesignated fund balance to lower the tax rate, as has been done in past years, in order to provide a financial safety net.
If Bethel did not received state funds in FY’14, he said, the town could safely absorb the shortfall.
But instead taxpayers voted at town meeting to use $250,000 from the undesignated account to lower taxes in FY’14.
Doar has now learned that Bethel will receive an estimated $84,552 in revenue sharing, down from the $115,000 estimate.
That would have worked with his original plan. But, he said last week, “I didn’t anticipate so much money being used from the undesignated balance. That will make cash tight this year and leave nothing to buy down the tax rate next year.”
At the end of FY’12 there was $1.1 million in the undesignated account, Doar said, and $258,000 was used in FY’13 to lower the tax rate.
In FY’13 the town received $116,135 in revenue sharing.
In Greenwood Town Manager Kim Sparks and selectmen had planned on receiving nothing in revenue sharing, compared to $43,254 they got last year.
Now estimates show an estimated $28,000 will go to Greenwood. Sparks said last week it will be applied toward tax reduction.
In Woodstock Town Manager Vern Maxfield just about hit the figure on the nose with his estimate. “We planned on $40,000.00 and will receive $38,634.41,” he said last week. “Not too bad.”
Last year the town received $55,499.
In other area towns, Andover is projected to receive $26,303 compared to $36,517 last year, and Gilead $9,755 compared to $15,620, according to the state treasurer’s website.
Newry is projected to receive $6,637 compared to $10,671.
Projections for towns are available at http://www.maine.gov/treasurer/revenue_sharing/projections.html.