Voters, not Legislature, OK’d SAD 34 increase

Belfast City Manager Terry St. Peter describes the mill rate increase in his city as “horrendous” (BDN, Sept. 14) and then proceeds to look everywhere outside of the city itself to pin responsibility for the $2 mill rate increase.

Rather than blame the state Legislature, which he says caused a huge spike in the city’s share of school funding, he should look at the school budget itself, which rose by $1.3 million, or almost 8 percent. That, despite a new state property tax reduction law that calls on cities and school districts to cap spending increases at roughly

3 percent. It was a conscious decision and vote by the school board to go above the statutorily set cap.

Despite the claim that Belfast lost $1.5 million in school funding, the facts show otherwise. In fact, SAD 34 as a whole received $100,000 more this year than last. And state aid to education for Belfast itself is $2.5 million this year, compared to $2.7 million last year – a small decrease that was caused by a combination of rising valuations and other factors. Under the old formula, Belfast would have experienced a much greater reduction.

That is to say, Belfast did better in terms of state funding this year than it would have, if not for the passage of the Essential Programs and Services law (EPS) and the passage of LD 1, the property tax reduction law. St. Peter has chosen to blame passage of the two laws when, in fact, they have helped to preserve most of Belfast’s school funding. With the infusion of another $250 million in statewide education funds in FY ’07 and ’08, Belfast will do even better in terms of state funding.

Meanwhile, the residents of Belfast are getting two other benefits to help reduce their taxes. The first is an increased Homestead exemption. It is true that the state has asked cities and towns to help pay half of the Homestead rebate. Property taxes are local and it is reasonable to expect local governments to be part of the solution, especially after the state has beefed up education spending by $250 million to help fight rising local property taxes, and invested another $40 million to support the higher Homestead exemption.

The state is contributing an additional $113,000 this year to Homestead refunds in Belfast – an increase of 77 percent. The combination of the state and local share of the Homestead costs means every Belfast homeowner will receive a $234 reduction on their property tax bill. Had Belfast made budget cuts to absorb its share of the Homestead costs, as did the state, the mil rate would have gone up less and the savings to Belfast homeowners would have been greater.

The other benefit to homeowners and renters in Belfast comes directly from the state – a significant increase in eligibility and benefit under the state’s Circuit Breaker program. Now families making up to $100,000 (and individuals making up to $75,000) who spend more than 4 percent of their income on property taxes can apply for the rebate program, which has a maximum benefit of $2,0000. Families that spend more than 20 percent of their income on rent also are eligible for the benefit, if their incomes are under $100,000.

Property taxes are local, meaning local residents and-or their local city or town council or selectmen must make choices about spending. The new state law adds a hurdle to spending beyond the cap. But it is ultimately up to local officials or residents to decide if additional school spending, a larger auditorium, or expanded town services are worth spending more on. “Yes” or “no” are both valid answers, and now it is a conscious decision for towns to make. The state made a conscious decision to live within its 3.1 percent cap.

Voters in SAD 34 chose to spend $1.3 million more this year, a choice that is not mine to question. But it is not a choice that was made by the state Legislature.

Rep. John Richardson, D-Brunswick, represents House District 63 and is Speaker of the Maine House of Representatives.