Funding local government

State Sen. Peter Mills may hold the record in the Legislature for proposing the highest number of perfectly reasonable changes to state law that go unheeded, often because of political pressure or a lack of legislative stamina. In the latest issue of the Maine Policy Review, he presents a doozy for improving the way the state contributes to the funding of local governments. His arguments are, once again, perfectly reasonable and have the added benefit of providing a primer on the workings of government. They should be taken seriously by lawmakers.

An excerpt of Sen. Mills’ commentary from the review, published by the Margaret Chase Smith Center for Public Policy at the University of Maine, is presented on today’s op-ed page. In it, he addresses what has become a perennial problem for service-center communities: the high level of property-tax exemptions and the inability of these communities to raise revenues other than by the property tax. Sen. Mills’ complaint is that, given these circumstances, service centers “think nothing of making demands on the school funding formula to solve their unrelated problems.” They have done this, he says, by diluting the formula with income and cost-of-living adjustments that skew the formula in their favor.

Sen. Mills has made himself something of an expert on the school-funding formula, having led the successful effort to reform it last year. His policy piece, however, shows that he is far from through. He suggests an additional half-dozen modifications, which include having the teacher-retirement funding within the formula. His most important suggestion, however, is to change the funding system so that it can be readily understood – just about anyone will admit that this is not the case now. The reason for simplifying the formula is clear:

Complexity works to the advantage of insiders by destroying the capacity of citizens and legislators to comprehend policy. What people cannot understand, they are compelled to ignore. We have enough experts on night hunting and lobster trap vents. We need more who understand how one-third of the budget is spent. We will have such people as soon as the formula is rewritten in plain terms with its principles suitably distilled.

Certainly, making government understandable is the first step toward increased public participation. As important is simplicity to ensure fairness, or equity. Politically, that is possible only if communities with service-center demands are able to fulfill the needs of residents without sending them into bankruptcy by way of property-tax loads. Sen. Mills has several suggestions for doing this, the most interesting to the Legislature might be his general proposal to target all state-derived local funds to the most-needy communities.

That would make for quite a battle in the Legislature, but the alternative is more of the hodgepodge system of tax distribution that provides collects plenty but leaves many communities needing more.