When Gov. Paul LePage announced his $6.3 billion budget January 11, he proposed eliminating the state’s municipal revenue sharing program which could impact the town of Boothbay by as much as $80,000-$100,000 in state revenue shares this year, according to State Treasurer’s Office. 

Although the Governor’s budget proposal is still weeks away from public hearing in the state legislature, Boothbay Town Manager Jim Chaousis presented a preliminary analysis to Boothbay’s board of selectmen, January 14 accessing the proposed state cuts that could carry a cost shift of roughly $300,000 with additional cuts in municipal general assistance, circuit breakers programs, homestead exemptions and commercial excise tax revenue. 

In a letter to local municipalities, LePage backed up his budget proposal for what he claimed is a growing dependency on unsustainable entitlement spending which forced his administration to consider major cuts to “lower value programs” while trying to avoid new tax increases. The LePage administration said suspending the state's municipal revenue sharing would result in a total loss of $200 million. 

The Maine Municipal Association is a nonprofit advocacy group that seeks to preserve the interests of municipal revenue sharing. 

MMA projected a $420 million dollar tax shift citing initiative that would eliminate business reimbursement programs and impose a cap on town excise taxes for registration of commercial trucks. 

According to Chaousis, excise taxes comprises 55 percent of revenue collected outside of property tax. Last year Boothbay collected roughly $546,000 in which $44,439.89 was from commercial trucks. 

The State of Maine’s municipal revenue sharing system was established in 1972. Since 1982 the state has set aside 5 percent from all sales and income tax revenue which in turn provides relief to property taxes and helps finance other municipal services, according to www.maine.gov website.

“I think through the democratic process this will be beaten up a lot,” Chaousis said. “But if the democratic controlled legislature doesn’t pass this, they’re going to have to make some decisions about what do they cut.” 

If LePage’s proposed budget passed through the democratic controlled state legislature, budget changes could go into effect by July 2013. 

Chaousis has compiled copious notes, pertaining to the town’s financial status and potential revenue loss, as well as data collected by the MMA, as the budget planning process for fiscal year 2014 gets underway. 

“Until (the Governor's budget proposal) gets through the democratic process, who knows?” Chaousis said to the board of selectmen. “But we also need to face the fact that we may not know how this is going to look when you set the annual town meeting warrant at the end of March.”