A little history of revenue sharing. Revenue sharing came about in 1972, when the state took away the ability of a municipality to create local taxes. Revenue sharing was to take 5 percent of the money raised by sales tax, and using a formula, distribute those monies to local towns.
Figures below provided by Maine Municipal Association show Windham’s share.
Windham’s A B C D E
Share 2009 2013 2014 2015 2015
$1,162,406 $1,027,862 $724,765 $669,014 $223,005
Loss of 0 -$134,544 -$303,097 -$55,751 -$501,760
Increase in
Property tax 0 $0.08 $0.17 $0.03 $0.29
If passed on
Actual Mil $11.75 $14.25 $14.45 $14.48? $14.74?
Rate
Columns
A – Shows the actual amount of revenue sharing distributed
to municipalities fiscal year 2009.
This was the last year the State honored the 5 percent for
revenue sharing.
B – Shows the actual amount of revenue sharing distributed
to municipalities fiscal year 2013.
The 5 percent this year was $138 million, but towns only
received $96 million.
C – In the fiscal year 2014 projections, our municipalities
will receive $65 million which is $73 million less than the $138 million. The
2014 budget has a hole of at least $119 million which could cause these figures
to change.
D – In fiscal year 2015 the projections are that revenue
sharing will only be funded to the tune of $60 million or $20 million depending
on the outcome of this year’s legislators. The MIL rates for D and E above are
for the municipal side only and would apply if the whole loss of revenue
sharing was passed on to the MIL rate.
The MIL rate (pronounced “mill”) is “the
amount of tax payable per dollar of the assessed value of a property. Property
tax in dollar terms is calculated by multiplying the assessed property value
and the MIL rate and dividing by 1,000. As a property may be subject to tax by
a number of different authorities, MIL rates are set by each taxing authority
so as to meet the revenue projections in their budgets,” as told by www.investopedia.com.
There are bills in front of the legislator that would fund
revenue sharing from fully-funded to not being funded at all. You can see how
fluid the outcome is. Understand the dilemma of the municipality which is
limited in their ability to raise revenue. Municipalities only receive revenue
from three sources, the State (revenue sharing), excise tax and the real estate
tax.
Looking at the above figures showing the loss of revenue
sharing, which the State has kept and used to balance their budget (which is
mandatory), you can see how frugal your municipal officials and town manager
have been to keep your MIL rate down and still provide the services expected.
The tax rate used above was the actual MIL rate for that year. Understand that
the MIL rate is a combination of county tax, school tax and municipal tax. In
Windham, revenue sharing is counted as revenue by the town and added to the municipalities’
general fund.
At present it looks as if the State is going to cut revenue
sharing even more than projected in fiscal year 2015. As your town councilor, I
ask for your help. Please contact your representatives and senator and ask them
to vote to restore revenue sharing.
RepJane.Pringale@legislature.maine.gov
RepTom.Tyler@legislature.maine.gov
SenG.plummer@legislature.maine.gov
Davidnadeau@windhammaine.us
We as a council will only have two choices this budget season,
pass the loss on to the real estate tax or cut services.
Please help. Send
an email or call your local officials.