State’s budget woes put municipalities in fiscal bind

PORTLAND — Cities and towns across Maine face a challenging task as they wrestle with their budgets in the face of a sluggish economy and severe financial problems at the state level.

Personnel cutbacks, deferred construction programs and increased fees for services are some of the steps contemplated by municipal officials to keep their budgets in line, said Pat Finnegan, assistant director of state and federal regulations for the Maine Municipal Association.

Even with such measures, property tax increases will likely be needed just to maintain basic services like police and fire protection, Finnegan said.

“It’s the most difficult budget process I’ve been through in my 11 years here,” said Yarmouth Town Manager Osmond Bonsey.

Local officials say part of the problem stems from the state’s economic slump, which has caused municipal revenues to level off or decrease after years of growth. A drop in new construction means no new sources of property taxes, while a decline in new car sales holds down excise-tax income.

In trying to balance its own budget, the state has reduced the amount of aid it sends to towns. The state is considering a decrease in local education aid, a gap that probably would have to be filled by local property taxpayers.

Meanwhile, the state has ordered towns to perform expensive duties — such as sealing landfills, isolating salt and sand sheds and encouraging recycling — but expects local taxpayers to pay the bills.

“They’re torn,” Finnegan said of town officials. “They understand the fact that the state is having an economic slowdown and that its budget will reflect that, but at the same time they’re upset that the state is looking at the municipalities to shoulder the load.”

About 80 Maine communities have banded together, trying to convince legislators and Gov. John R. McKernan to support the idea of local sales taxes. They are also pressing for delays in complying with the state environmental mandates, according to Freeport Town Councilor Kirk Goddard.

McKernan spokesman Willis Lyford said Friday that the governor dislikes certain aspects of the idea of a local sales tax, but that his office is reviewing a list of the state mandates that could be delayed.

Meanwhile, municipal officials are weighing alternatives as they go through the budget process.

South Portland City Manager Jerre Bryant has proposed cutting 10 full-time jobs and two part-time jobs from the city’s 260-employee force. City garbage service would be eliminated, accounting for six jobs, and collection costs for residents would likely triple.

In nearby Westbrook, Administrative Assistant Peter Eckel has proposed increases in permit fees for liquor licenses and restaurants as a way to generate new revenue.

Freeport Town Manager Dale Olmstead calls his new spending plan a “maintenance budget” designed to provide the services townspeople expect, but nothing more.

Road reconstruction and resurfacing that should generally take place every 10 years may be put on a 20-year schedule, he said.