SEBAGO — I was pleased to see your recent editorial in support of state Rep. Mike Sylvester’s proposal to allow municipalities to enact a local-option sales tax (Our View, Dec. 4). Kudos to Rep. Sylvester for putting this important issue in front of the Legislature. As your editorial points out, almost every state in the nation has adopted local-option sales tax legislation.
The fact remains that local property taxes in Maine carry a disproportionate burden of the cost of local services. This is a drag on Maine’s economy, hurting homeowners, renters and businesses. If the governor and Legislature are not willing to finally honor the statutory funding levels for the municipal revenue sharing program and the 2004 citizen-approved school funding formula, they should at least adopt legislation that would allow for a municipal-regional partnership to broaden revenue sources through a local-option sales tax.
As I understand Rep. Sylvester’s proposal, municipalities collecting the sales tax would distribute 15 percent to outlying towns. The concept of sharing is laudable and needs to be a feature of any program, but how would that formula actually work? Why 15 percent, and how far out is an outlying community?
As an alternative, I would encourage the Legislature to authorize county governments to serve as the mechanism through which a regional local-option sales tax could be managed. Under such an approach, counties would be empowered to serve as the legal entity through which a municipality or a group of municipalities – assisted, perhaps, through a regional planning organization – could submit for voter approval a proposed capital improvement program, to be funded in part or whole by a local-option sales tax.
By restricting the local-option sales tax to just infrastructure, municipal and county officials would have every incentive to structure a proposal to ensure that all areas within the political boundary of the county would benefit. Examples of eligible infrastructure could include roads, sidewalks, culverts, public trails, Wi-Fi and technology. Sales tax revenue could be used to leverage other resources, including state and federal funds or additional funds that a municipality might independently decide to contribute to a specific project within the capital improvement program.
Why use county government? There are a number of legal and practical reasons. With close to 500 municipalities in Maine wrapped into 16 counties, efficiency alone is a persuasive reason. Legally, counties are governed through a publicly elected board of commissioners who represent all geographic regions within a county. As well, over the last few years, Maine’s counties have become professionally staffed with the systems and capacity to manage a range of public services.
Of further relevance, infrastructure investments are most effective when planned and implemented regionally. To this point, consider regional growth data. In 1960, the urban core cities of Portland, South Portland and Westbrook combined made up 60 percent of Cumberland County’s population. By 2010, they made up just 40 percent of the county’s population. In just the Lakes Region alone, nine towns grew from 8 percent to 20 percent of Cumberland County’s total population.
It has now been over 12 years since the Brookings Institution report “Charting Maine’s Future” was released. On the critical issue of tax reform, Brookings noted that “it will be imperative for leaders to address once and for all the tax code’s extreme overreliance on property taxes and its overly narrow sales-tax base.” Consistent with the Press Herald’s recent editorial, Brookings went on to advocate that “Maine must move to broaden its revenue base by ‘exporting’ more tax burden onto Maine’s millions of visitors and tourists.”
We have a new governor and a new Legislature. Will they be caretakers or will they be change agents? I hope the latter, and to that end I encourage them to dust off the Brookings report and get to work on tax reform, because it is arguably more “imperative” than ever. After decades of talk, maintaining the status quo is at best a mediocre strategy. We can do far better, but it will take strong leadership and a shared commitment by our leaders and citizens to make it happen.
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