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HomeMy WebLinkAbout2009-02-09 09-075 RESOLVECOUNCIL ACTION Item No. 09 075 Date: 2-9-09 Item/Subject: Resolve, Expressing the Concerns of the Bangor City Council Regarding the Proposed State of Maine Biennial Budget. Responsible Department: Executive Commentary Revenues from State government are the second largest source of municipal funding in Bangor, representing over 30% of our total revenues. The Governor's proposed biennial budget significantly and disproportionately reduces a number of local aid programs, including Municipal Revenue Sharing and Local Road Assistance Funding, a program that supports our street paving and reconstruction program and the summer and winter maintenance we provide to state highways. The funding for both of these programs is automatically reduced as the state revenues they are based on go down. In addition to these equitable and automatic reductions, the budget proposed an additional 10% reduction in revenue sharing and a $5 million transfer of local road assistance funds from the State highway fund to the State general fund, resulting in a $100,000 (20%) reduction in funding to Bangor. Finally, aid to education is proposed to be flat funded at this year's already reduced level, a cut of over $500,000. Such reductions will require property tax increases, service reductions, or both. The attached resolve calls upon our State Legislative relegation to exercise its best efforts to mitigate the impact of proposed State budget cuts on the City and its property tax payers by working to ensure that the reductions to Municipal Revenue Sharing and Local Road Assistance are proportionate to the revenue losses experienced In State sales, income, and fuel taxes, take steps to guarantee that reductions are restored at the earliest possible time, and support efforts to make certain that federal stimulus funds received by the State are equitably shared with local govemments in order to mitigate property tax increases or local service reductions. Department Head Manager's Comments: This has been reviewed and is recommended by the Government Operationsmittee. City Manager Associated Information: Budget Approval: Legal Approval: Introduced for X Passage First Reading Referral Finance Director Page _of_ Solicitor 09 0'75 Assigned to Councilor Gratwick February 9, 2009 CITY OF BANGOR (TITLE.) Resolve, Expressing the Concerns of the Bangor City Council Regarding the Proposed State of Maine Biennial Budget. WHEREAS, the Governor has proposed a biennial budget containing numerous program cuts and reductions; and WHEREAS, a number of these reductions affect programs that provide financial support to Maine's municipalities; and WHEREAS, since over 30% of Bangor's total revenues come from State government, significant reductions in state support will require property tax increases, service reductions, or a combination of both; and WHEREAS, certain of these reductions, particularly the proposed reduction in municipal revenue sharing, will have a disproportion impact on municipalities; and WHEREAS, 5.1% of state sales and income taxes are provided to municipal governments in the form of revenue sharing and, as state revenues fall, so do the amounts provided to municipalities; and WHEREAS, the budget proposes that, in addition to these automatic reductions, revenue sharing be cut an additional 10%, resulting in a disproportionate impact on municipalities; and WHEREAS, the cut will be implemented through a two-year reduction in the revenue sharing percentage from 5.1 to 4.6% and we are also concerned that this percentage reduction may continue or become permanent in the face of chronic state budget shortfalls; and WHEREAS, the budget also proposes that Local Road Assistance, a program funded through the Highway Fund and which supports repaving and reconstruction of local roads and costs associated with municipal maintenance of state highways, be reduced during the second year of the budget by the transfer of $5 million to the General Fund; and WHEREAS, here again, the amount going to Local Road Assistance is a fixed percentage of the Highway Fund and will automatically decline as Highway Fund Revenues decline; and IN CITY COUNCIL February 9, 2009 Motion Made and Seconded for Passage Passed � L A ck/y�l h l )4j DEPUTY CITY CLERK # 09-075 R E S O L V E (TITLE,) Exvressin¢ the Concerns of the Bangor City Council Regarding the Proposed State of Maine Biennial Budget Assigned to Counciloi�—"411a� 09 0'75 WHEREAS, the transfer of $5 million will, therefore, result once again in a disproportionate impact on local governments; and WHEREAS, the City of Bangor will see a reduction of about $100,000 in local road funding, a cut of over 20%; and WHEREAS, as a matter of equity, the proposed $5 million transfer should be equally shared by all programs and agencies supported by the Highway Fund; and WHEREAS, other reductions in such areas as Tree Growth Reimbursement and Code Enforcement Officer Training will also impact municipalities; and WHEREAS, while we recognize that the State faces a budgetary shortfall that must be addressed, cities and towns in Maine face a similar crisis due to reductions in automobile excise taxes, assessed values, and charges for services; and WHEREAS, while all levels of government must adjust to today's economic and fiscal crisis, reductions should be equitable and, to the greatest extent possible, avoid simply shifting expenses from such broadly based taxes and sales and income to property taxes; and WHEREAS, we urge our State Senator and State Representatives to work to mitigate the impact of reductions in state shared revenues on Maine's cities and towns and their property tax payers; and WHEREAS, should the federal government approve a stimulus plan that provides financial aid to State Government, the fiscal relief provided should be shared with local governments; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BANGOR THAT We call upon our State Legislative Delegation to exercise its best efforts to mitigate the impact of proposed State budget cuts on the City of Bangor and its property tax payers by working to ensure that the reductions to Municipal Revenue Sharing and Local Road Assistance are proportionate to the revenue losses experienced in state sales and income taxes and highway fund revenues, take steps to guarantee that reductions, if any, are restored at the earliest possible time; and support efforts to make certain that federal stimulus funds received by the State are equitably shared with local governments in order to mitigate property tax increases or local service reductions that will otherwise result.