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HomeMy WebLinkAbout2003-08-18 Strategic Issues Committee MinutesSTRATEGIC ISSUES COMMITTEE MINUTES August 18, 7003 Councilors Present: Nichi Farnham, Gerry Palmer, John Rohman, Richard Greene, David Nealley, Dan Tremble, Anne Allen, Gerry Palmer Staff Present: Fd Barrett Other Present: The meeting convened at 5:00 p.m. 1. Review of Proposed Competing Ballot Measure — Tax Reform Barrett said that the Governor has Proposed a revised competing measure to be placed on the November election ballot as an alternative to the referendum proposed by Maine Municipal Association. The Legislature is scheduled to take action on this proposal In the coming week. The Council may wish to consider expressing its views on this proposal to our legislative delegation prior to their consideration of this proposal. The first element of the proposal would adopt the essential programs and services funding model. There has been a lot of effort in the state over the last few years to adopt an essential services funding model. It has gained a lot of support and would more than likely be the basis for school funding in the future. Barrett said that this could also be the model used to implement the MMA proposal. This should not negatively impact the City of Bangor. The significant impact would be on schools that receive wary little state aid, such as South Portland. The model has not yet been fnaliaed. The second part is the phase in to reach the 55% state funding level. This is where there Is a significant difference between the Governor's proposal and MMA's proposal. The Governor's proposal Is to phase this in over so years. The increases would be funded through the natural growth in the state revenues, averaging $100 million per year. The state would be designating about 2/3 of the increase in state revenues to school funding. This raises the issue of the state's intent to not raise taxes and that fad that this needs to be discussed in the legislature. Barrett said that in the first year the Govemor's proposal is to fund 84% of 49% of essential programs and services or about 42% or a $7 million reduction in local education aid. Then it gradually goes to 55% of 100% of essential programs and services. This year, the local communities in the state are already spending 1 billion 15 million on education. The third element would establish a spending cap that would apply to municipal purposes excluding the county tax and education through fiscal year 10. The cap is based on the average of the last ten years growth in real personal income. Currently the cap would be 4.6%. Barrett discussed the various exceptions and circumstances for adjustments. He said his concent is that he anticipates that there will need to be a lot of regulations written around this. Barrett noted that the state system of "fiscal restraint" requires the Governor to present a state budget to the Legislature that falls within the appropriation limit, but the Legislature is not restricted or penalized in any way d it chooses to authorize spending at any higher level. Barrett said that there are two Items not in this proposal that were in the original proposal. One is local option sales tax and the other is an incentive for regionalization efforts. Barrett said that the question at this point is whether Council wants to communicate any position or feeling to our legislative delegation. Barrett said that the general feeling is that this is likely to pass. Barrett said that the Council has adopted a resolve from last year supporting MMA's effort. Rohman wanted to know If the smaller communities had more of an impact. Barrett said that the smaller the community the less the flexibility. He said that there are various ways to deal with the issues, and there are many unanswered technical questions. Rohman said that the Governor's proposal has a lot of legitimate response, however this is not tax reform, it's relying on the yearly revenue increase. He said that we still have the same burden. Barrett said that there is some concern as to the way the language is worded in the question such that It might Indicate that we are lacking in the current tax structure. Nealley said that this Is a rush attempt on the part of the State Legislature to address the Issue that the MMA's proposal has. He suggested waiting to find out more about the State's proposal. Barrett said that there will probably be a lot of uncertainty in the details of the State's proposal and that there will be regulations developed to implement it, particularly involving the proposed municipal spending cap. Tremble said that out of the two proposals, this one seems most responsible Greene wanted to know where the additional funds were coming from. Barrett said that in the Governor's proposal, the designated source is the natural growth in State revenues. In the MMA proposal, the funding mechanism is not specified. Palmer said that it Is Important that we make some statement as the City of Bangor does provide a leadership role In the state. Farnham mid that her message to the legislature is to step outside their party affiliation and look at the municipalities In your district. Rohman urged the Council to wait and see what happens and get together in two weeks. Then we should make a statement as we do have a responsibility to the state. Nealley agreed that Bangor should make a statement. Barrett said that a referendum by the state is not legally binding. If the MMA proposal is adopted, then the legislature would probably adopt some local spending limits. 2. Evaluation of the City Manager Farnham noted that the each councilor has received a progress report of Council goals and accomplishments and an annual employee evaluation for the City Manager. Barrett suggested that the completed forms should be returned to lane Robbin&Teel by August 2P. The Council agreed to this data The Committee voted to go into executive session. 3. Executive Session— land Acquisition— Bangor Police Department Headquarters