SOUTH PORTLAND – South Portland made headlines in late 2007 when Mayor Jim Soule suggested southern Maine, as Maine’s economic engine, secede from the rest of the state.

On Monday, South Portland City Councilor Alan Livingston joked that he’s starting to think Soule might have been onto something.

“I debate on saying this, but I guess I will,” he said. “Maybe our former mayor was right and maybe we need a different state down here in the southern part.”

Livingston was joking, but the comment stemmed from a serious vote conducted at Monday’s council meeting. By a vote of 6-0, the council adopted a resolution “expressing opposition to the proposed State of Maine biennium budget.” Gov. Paul LePage’s proposal to balance Maine’s books – including a suspension of state revenue sharing, changes to the Business Equipment Tax Reimbursement program, and a shift in commercial excise fees – threaten to reduce city coffers by nearly $3 million in the budget’s second year.

“This is a message that we are sending to out elected leaders, that we are sending to out governor, and that we are sending to the Legislature in Augusta,” said South Portland’s mayor, Tom Blake.

It’s not just South Portland that has its hackles up. Eric Conrad, director of communications for the Maine Municipal Association, says that while South Portland may be among the first to adopt an official resolution, more than a dozen communities across Maine have made some form of anti-budget statement, from issuing press releases to mayoral proclamations.

“And that’ll probably number in the hundreds pretty soon,” said Conrad. “Statewide, we see this as a $420 million shift in the financial burden, and not really onto the municipalities, but directly onto the property taxpayers and homeowners.”

According to Finance Director Greg L’Heureux, South Portland sees about $1.8 million annually in revenue sharing from the state sales tax. The loss of excise taxes on tractor-trailers would cost the city $424,500. Elimination of the Business Equipment Tax Reimbursement program would then cost South Portland $761,807 in 2015, partly because most retail machinery and fixtures are not reimbursable under the surviving business equipment tax exemption program, into which many items would shift.

L’Heureux says the governor’s changes would rob the city of $2.03 million in the fiscal year ending June 2014, and $2.8 million the following year. To maintain services, he said, the city will have to reach out to taxpayers for an extra 60 cents per $1,000 of property valuation in fiscal year 2014 and another 23 cents the following year.

Add to that a suspension of the $10,000 homestead exemption for homeowners age 65 and younger, and local tax bills could spike 10.7 percent, said L’Heureux. In dollars, that’s an extra $327 a year on the median-valued home, assessed at $195,000, said L’Heureux.

And that’s before factoring school spending, and assuming municipal costs do not rise one penny, a probability City Manager Jim Gaily deemed “unlikely.”

“This is not a good scenario that we are going to be faced with,” said L’Heureux. “This isn’t just a pass the buck, it’s a pass the lack of bucks.”

“I think the worst-case scenario, if it plays out, some of our citizens would be astounded at the impact this could have on our community,” said Blake. “We would be laying off multiple dozens of people. We would be eliminating services and programs. No doubt about it.”

Although he joked about secession, Livingston did cut the governor some slack, noting that much of today’s woes arise from previous spending habits.

“Unfortunately, in past administrations we have constantly given and given and created where we are today,” he said. “Obviously, we are now in for tough times ahead.”

But others on the council were less forgiving of LePage’s effort to pull in the fiscal reins.

“It is unfortunate that we have to have this resolution before us but there are just so many angles where balancing the budget just seems wrong,” said Councilor Patti Smith. “I wouldn’t say morally wrong, but wrong in the way it would choke so many communities in terms of their ability to be vital and attractive for growth and economic development.”

Smith also faulted the fact that LePage’s budget is “skewed to certain age brackets.”

While the homestead exemption is slated to be cut for younger people, LePage wants to double it for homeowners age 65 and older. According to L’Heureux, that means that while the change would cost the owner of a $195,000 residential property $165, senior citizens would actually make $20.

“I love people over 65, I’m not awfully far from that myself now,” said Councilor Linda Cohen, “but as a loan officer, and I’m sure others have seen this, there are young people who are drowning in college debt. Every little bit we pile on them makes it harder and harder.

“The ripple effects of what will happen with this [state budget] if it passes are just huge,” said Cohen.

Gailey also has recently noted that the BETR changes could have a dramatic impact on South Portland’s many tax-increment financing deals.

“Were still working on that, because once you start dealing with the TIF dollars, you’re talking some complexities,” said Gailey.

Most of the impact has been rolled into the expected $761,807 BETR loss. However, Gailey’s main concern is that TIF angle, being what it is, may be the one thing that gets overlooked as municipalities play pushback on the state budget.

“My fear is that it’s a very complicated budget proposal and human nature has it that if we don’t know or don’t dive in deep enough to a particular subject like this, we typically don’t address it,” he said. “It’s easy for people to understand state revenue sharing or commercial excise, but this is one line that has a major impact to a number of businesses throughout the state of Maine and it’s an incredibly complex subject.”

The governor’s press secretary, Adrienne Bennett, did not return a call requesting comment on the South Portland opposition vote.