HomeMy WebLinkAbout2001-12-26 02-65 RESOLVEdace: 12-2&01
Item/Subject: Reserve, Calling Upon the State Legislature to Adopt the Debt Avoidance Act
Responsible Depa. b. nt CityManager
For a number of years, the City of Bangor has worked toward receiving the authority to impose a
local option tax. This year, the effort has been devoted to a proposal titled the "Debt Avoidance
AcG" Under this aft, municipallbes would be authorized, after a referendum, to adopt a local option
tax of loo for a Wined not to exceed five years for certain specified capital projects.
The Finance Subcommittee of the Special Committee on the Future of the Auditorium has
recommended that such a Ponding mechanism be used W construct a new large event facility at
Bass Parc.
Staff has been working with the Maine Service Centers Coalition, the Maine Municipal Association,
and the Taxation Committee of the Rate Legislature on this proposal. In addition, we have also
worked with representatives of the King Administration and have received the Governors
endorsement for this proposal. We are now in the process of urging municipalities throughout the
state to adopt resolutions of support.
I would recommend that the Council adopt the attached resolution.
Department Head
ManageYs Comments:
440 ?
City Manager
Associated Information: Reales
Budget Approval: nn
France DlfeGor
Legal Approval:
Introduced for
X Passage
Firs[ Reading page_ p/
_Referral
02-65
AesiVed to Councilor Palmer Dece er 26. 2001
CITY OF BANGOR
MILE.) Resolve, Calling Upon the State Legislature to Adopt the Debt Avoidance Act
WHEREAS, municipalities throughout Maine are faced with significant capital needs required to
support regional economic development, provide essential public services, and
meet the goals and requirements of state policies; and
WHEREAS, at the present time, these projects can be funded only through the issuance of
general obligation debt to be repaid over time through the property tax; and -
WHEREAS, the interest Costs associated with long-term borrowing dramatically Increase the
overall costs of such projects as well as the time period over which such costs will
be experienced; and
WHEREAS, many jurisdictions currently have property tax rates which already exceed the
burden which can be reasonably be placed on their residents; and
WHEREAS, increasing property tax rates for such needed purposes may result in numerous
unintended consequences including Increasing the economic incentives which may
further the continuing loss of population in certain communities and the demand for
additional services and state expenditures in suburban and rural communities facing
the challenge of growth; and
WHEREAS, many capital projects undertaken by individual communities provide regional
benefits through the provision of services to non-residents or by creating economic
opportunities which benefit entire regions; and
WHEREAS, It is reasonable and appropriate that a mechanism be provided which will allow for
those benefiting from these projects to participate in their cost; and
WHEREAS, the Debt Avoidance Ad currently under consideration by the legislature would
provide municipalities with an alternative method of financing such projects, reduce
the long-term costs of these projects, and spread their costs to those who benefit
from them through allowing local elected officials and dozens the option of voting
to enact a local option sales tax for a limited period of time and for specified capital
projects.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CIN OF BANGOR,
THAT:
We call upon the State Legislature to approve the Debt Avoidance Act as a mechanism to
provide municipal governments in Maine with the authority, after voter approval, to adopt a
local option sales tax for specified capital projects and for a period not to exceed five years.
Such a funding mechanism will improve the long-term stability of the property tax, reduce
governmental costs associated with interest on deb4 and recognize that certain projects
undertaken at the local level carry regional benefits or are undertaken In support of
established state policies deemed to be of benefit to all.
BE lT FURTHER RESOLVED THAT:
The Clerk shall cause copies of this resolve to be made available to our local state legislative
delegation and the Joint Standing Committee on Taxation.
IP CITY COUNCIL
December 26. 2001
Motion Made and Seconded
for Passage
Senator Tom Sawyer sPole
to the Council regarding
this Resolve
Passed
9 02-65
BNS014➢
(TfrLE,) coning upon theaa heeislatnre
to Adopt the Debt Avoidance Act
"signed b