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Revenue Sharing Cuts Will Affect Local Services in Fort Fairfield


By: David Deschesne

Fort Fairfield Journal, January 23, 2013

FORT FAIRFIELD—The implications of Governor LePage’s recent announcement to cut revenue sharing with all municipalities in Maine appear to be lost on most people in Fort Fairfield as they do not understand the significance of those cuts and how they will directly impact the services provided by the town’s local government.

Fort Fairfield Chamber of Commerce Executive Director, Mike Bosse said after the headline appeared in the weekend Bangor Daily News, front page, above the fold, the town office didn’t receive one call from anyone who had concerns over the town’s proposed lack of revenue.

“We are a town of senior citizens. That headline did not make any sense to any of them,” said Fort Fairfield town council member, Sue LeVasseur. “A lot of elderly people don't know what it takes to run the town; [they think] you're supposed to pay your taxes and the town runs. They don't know where all that money comes from because they think you pay your taxes we're going to be fine. They don't realize what we get from other sources.”

“This is a problem we face with how we take in input from the citizenry. We need to engage them. I think most people would agree that's the way Fort Fairfield handles things,” Bosse told the town council. “We saw it with the investment strategy and the Vision Fort Fairfield group; there was a lot of input required, it took a process, it took a long time to compile that information and we're going to need to do that to set the community's priorities, to establish what the priorities are.”

Fort Fairfield town manager, Dan Foster showed the town council the town's valuation book for 1929 which illustrated how the town raised its own money then, while receiving very little from the State to provide services to its local inhabitants. “Municipalities were pretty much on their own for a long time. Basically, it was the town who decided how they were going to raise the money they needed for the services they provide,” he said.

However, one must bear in mind that in 1929 there was not as much of a demand on government services as there is now since most of the people were self-sufficient on their own farms (which did not suffer from burdensome state and federal regulations) and did not enjoy the luxuries we do today. Ergo, most roads were not expected to be plowed in the winter because people were able to stay on the farm and eat; there was no food stamp program, Temporary Aid to Needy Families (TANF), Women Infants Children (WIC), no subsidized housing, no state fuel assistance or any of the other cost-prohibitive welfare-state programs that sprung up forty years later. In that respect, government was much smaller because there were less agencies to staff with bureaucrats and less money was needed to be collected and redistributed. Most people took care of themselves without the aid of government.

“The state didn't provide the money to take care of paupers, the local towns did,” said Foster.

But, it was when the state got involved and started paying people more money to stay home than they could make at a full time job, that things started going awry, which is where we are now with the state running out of money to share with municipalities.

Fort Fairfield’s current budget for 2011-2012 is:

SAD #20 $1,990,429.00

County 185,115.00

Town 2,637,518.00

Total Expenses: $4,813,062.00


The town raises $3,516,970.00 from real estate taxes to fund the above costs. What the Governor is proposing is as follows:


No revenue sharing -$370,000.00

No Homestead Exemption -$117,254.00

Excise Tax Reduction - $30,000.00

Personal Property Tax

Reduction - $33,520.00

Total Reduction in State Aid to Ft Fairfield -$550,520.00

This would represent an increase in Fort Fairfield’s mil rate of 3.62 mils or a 15.7% increase in real estate taxes. The mil rate would go from 23 to 26.62 These numbers do not take into consideration the impact on Fort Fairfield’s school budget. This would be in addition to a loss of $264,000.00 that has already been absorbed from cuts in revenue sharing since 2008.

One of the ways towns used to collect money in addition to property taxes was by taxing the inventory of their local businesses. By 1972, businesses in Maine had begun to complain about the burden of taxation on their inventory and successfully lobbied the State to make some changes. “The state said we don't want towns doing that anymore because it's hurting business; what we're going to do is institute a program called revenue sharing,” explained Foster.

This switch took away from municipalities the ability to assess an inventory tax and replaced that money with a revenue sharing program from tax receipts derived from sales, income, excise, and alcohol taxes. That system worked fine while the public had income to tax and money to spend on items that featured such taxes. But today, with the devaluation of the dollar to ‘junk bond’ status and loss of our nation's wealth due to an untenable debt load to international bankers, people in Maine do not have the income they used to and have stopped spending money. Thus, the pool that the state derived its revenue sharing funds from has begun to dry up.

“Municipalities once had a way to gather the resources that they need to pay for the expenses that they accrue within their own community,” said Foster. “What the state has done is gone in periodically and told them they can't do that anymore and offered state money to augment those lost receipts. Then, years later when things get tight they say they can't do that anymore. In the meantime, by law, municipalities have no recourse as to the ability to find different ways to raise funds.”

“It is through no fault of our own we find the ability for us to be able to handle our own affairs in our own community get further restricted and what the state has done is now causing us to either raise more local taxes or stop providing services.”

“If we're even looking at getting cut by half of the proposed $550,000, because of what we have lost at this point since 2008 it is no longer about 'cutting fat' out of our budget. It is not about shuffling this or shuffling that. It's about: there's something we're not going to be paying for.”

While Foster says Fort Fairfield will have its problems, the shortness of funds will have a negative impact on communities all across the state. “There are going to be some very interesting discussions within communities as they look at how they're going to deal with that. I can't tell you how important it is to me that we are part of a functional discussion as to how we're able to do that.”

“I think we've all seen in the past week what impact it has on people when you don't communicate,” said Bosse. “We can establish the example that the governor has already set up for us that this was kind of unilateral, he came up with this on his own. He didn't ask for input. That's not how Fort Fairfield works, it's important that we establish a plan to engage the citizens of Fort Fairfield.”

One of the information-gathering strategies is to place budget items on a ballot to let people advise the town council what they would like to see money spent on, or what programs to cut. “The method we used this summer that we really got a lot of positive feedback on was the Citizens Centre annual report that in a nutshell outlined what our community's budget is, how the money is spent and what comes in. It was very well-received,” said Bosse. “What we'd like to do is put forth the budget for the next fiscal year and put it into this format and ask people what they like about it, what they don't like about it, what they feel is important to them for the services the community should be offering.

Bosse suggests at some point there could be some citizens’ meetings to determine what services Fort Fairfield citizens would like to keep, or have eliminated. “As Dan mentioned, there's not much fat in the budget. So what we cut now, we're getting to the meat of our budget. What's important, I think, is that we be proactive. That's how this town does things, that we not sit back and unilaterally say this has got to go, or that's got to go. Some people perceive that's how things are done. That's not how Fort Fairfield operates. From what I've seen, I'm very confident that Fort Fairfield will get through this crisis; some of our neighbors probably won't fare out as well as we will.”



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