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