A Game-Changing Election
(from Maine Townsman, December 2010)
by Geoff Herman, Director of State & Federal Relations, MMA
On Nov. 2 the voters of Maine picked a new team to run state government. There may be times when it is difficult to discern the true intention of the electorate, but not in this case. The primary motive driving this personnel change was the belief that the new team would create enhanced employment opportunities and otherwise improve Maine’s economic climate.
A decidedly Democratic Maine Senate went decidedly Republican. An overwhelmingly Democratic Maine House went closely Republican. And Republican Paul LePage, the Mayor of Waterville for the last seven years and a councilor in that City for most of the past decade, was chosen from a field of five as the state’s next Governor, with 38 percent of the vote.
As might be expected, different interest groups in Augusta are reacting differently to this political sea-change. Business interests are overjoyed but state government workers are wary. Environmental groups, social service advocates and school teachers are so jumpy as to make a cup of coffee nervous.
As is their nature, municipal leaders seem to be taking a wait-and-see attitude to this new direction in Augusta. Actions will speak much louder than all the pundits’ predictions. As a general rule, municipal folks are non-partisan with respect to their dealings on the local level and non-partisan in the way they address matters of public policy. As far as most selectmen or city councilors are concerned, a good idea is a good idea no matter who the author. Same goes for the not-so-good ideas.
If municipal officials as a group had but one wish (or three), it would be that the new Administration and incoming lawmakers will make decisions that: (1) respect the important role of local government in the intergovernmental system; (2) acknowledge the inherent integrity of community-based decision making; and (3) strive to honor the various agreements and commitments embedded in state law that taken together define the state and local government compact. Failing to honor a commitment damages any trust-based relationship. In the absence of trust, it becomes difficult to implement long-term solutions to major challenges. At the intersection of state and local government, those challenges include transportation funding, equitable school financing, predictable and meaningful property tax relief and the achievement of a more evenly-balanced burden among the state’s three primary taxes. The arduous effort to develop the “Highway Simplification” proposal, and the obstacles encountered (see accompanying article by Kate Dufour), present a good example of how trust is a necessary ingredient in order to move structural change forward.
MMA’s Legislative Agenda. Although the procedural details may differ from biennium to biennium, the basic steps associated with developing MMA’s legislative agenda remain the same.
To begin, there is a brainstorming effort whereby all the elected and appointed municipal leaders in the state are asked to identify municipally-related legislative initiatives they believe should be advanced to the Legislature. This occurred in July and August of this year, and the brainstorming survey generated more than 230 different legislative proposals that municipal officers throughout Maine thought worthy of consideration.
MMA’s 70-member Legislative Policy Committee (see listing of LPC membership on pages 15-18) picked up the process at that point, and in two separate steps winnowed-down the brainstorming list, synthesized commonly-shared ideas, and created the framework of a detailed legislative agenda. This stage was completed at MMA’s annual Convention in October.
For the final stage, MMA’s advocacy staff drafted the priority legislation identified by the Legislative Policy Committee, and one final meeting was convened on Dec. 8 to review, make necessary modifications, and ultimately approve the legislative package.
MMA’s legislative agenda for the 2011-2012 biennium is described in detail below. In recognition of these difficult economic times, the overarching themes of the legislative agenda developed by the Policy Committee are restraint, accountability, and mandate relief.
Tax Policy and Intergovernmental Revenue. The Association’s legislative agenda can be divided into three categories. The first involves five initiatives regarding matters of tax policy and intergovernmental revenue.
Revenue Sharing. The first bill in this category is an accountability measure that amends the statute governing municipal revenue sharing to make the state’s Local Government Fund an “irrevocable trust”. The Local Government Fund holds the revenue that is ultimately distributed to the municipalities for the express purpose of providing property tax relief. Nearly 40 years ago this program was created under the express “legislative finding” that “the principal problem of financing municipal services is the burden on the property tax”, and that “it is necessary to provide funds from the broad-based taxes of State Government (in order) to stabilize the municipal property tax burden and to aid in financing all municipal services” (30-A MRSA §5681). Despite that fundamental recognition, municipal revenue sharing has been deeply raided by the Legislature. Over the past two years alone, $60 million has been taken out of this property tax relief program in order to balance the state budget.
Homestead Exemption. MMA’s Homestead Exemption legislation has elements of restraint, accountability and providing options rather than mandates. The purpose of this bill is to make the Homestead Exemption law more straightforward by setting the face value of the exemption at $5,000 (rather than $10,000), with the state fully reimbursing the $5,000 exemption rather than reimbursing only half of the $10,000 exemption. Although dropping down to $5,000 may appear to devalue the exemption, that is not the case in communities with a largely residential make-up because an unreimbursed homestead exemption has the direct effect of increasing the general property tax rate, which doesn’t help anybody. For those communities where an unreimbursed homestead exemption makes sense, the bill also establishes a local option opportunity whereby any town or city could establish a higher-value homestead exemption, not to exceed $15,000, recognizing that the local-option component will not be eligible for state reimbursement.
Tax Exemptions. For decades, the municipalities have been trying to address an inequity in the property tax code where it provides an unquestioned 100 percent property tax exemption to all “charitable” corporations and “literary and scientific” institutions. The political lock on these overarching tax breaks is so powerful; all attempts to modify the exemptions in any significant way have been unsuccessful. On the theory that there is no straight-faced reason this blanket property tax exemption should necessarily apply to the automobiles owned by these corporations and institutions, this bill would infuse some accountability into this special exemption. Specifically, the excise tax exemption provided to the literary and scientific institutions (i.e., the private colleges and prep schools) would be repealed. The exemption for the charitable corporations would be limited to those vehicles that are used predominantly for the purpose of transporting or delivering tangible goods to persons who are eligible for charitable services. The revenue impact associated with limiting these exemptions isn’t huge, but there is a principle at stake. The motor vehicles owned by these tax exempt corporations contribute to the need for road and bridge repair just as much as anyone else’s.
Tax Reform (in baby steps). The “Streamlined Sales and Use Tax Agreement” was initiated by the National Governors’ Association and the National Association of State Legislatures over 10 years ago. Forty-four states currently participate in the Agreement to some degree, and 23 states are either conforming or heading into conformance with the Agreement. Conforming to the Agreement involves making the necessary adjustments to the state’s tax code so that it does not conflict in terms of definitions and application to the sales tax codes of other conforming states. Conforming to the Agreement does not require any state to apply a sales tax in any way it does not wish to; it only requires uniformity in approach to those retail activities the state chooses to tax. The overarching goal of conformity with the Agreement is to eventually allow – through nothing less than an act of Congress – the conforming states to administer a sales tax that applies not only to the bricks-and-mortar stores within its physical jurisdiction, but also the catalogue and Internet stores as well.
The municipalities have been trying to convince the Legislature for over 20 years to comprehensively reform Maine’s outdated and crumbling tax code that relies ever more relentlessly on the property tax for revenue stability. At the moment, that goal appears politically out of reach. Trying to position Maine toward conformity with the Streamlined Sales Tax Agreement is a measured first step toward modernization.
Tree Growth/Farmland Conversion. Under current law, a person may transfer property enrolled in the Tree Growth tax program into the Farm and Open Space tax program without penalty, and the forested acreage included in that transferred parcel is treated for all taxation purposes as though it was still in the Tree Growth tax program. The affected municipality, however, loses the Tree Growth reimbursement it was receiving from the state that was associated with the forested acreage, and the landowner is under no obligation to provide a forest management plan with respect to the forested land included within the transferred parcel. This bill provides that the municipality will still receive Tree Growth reimbursement for that forested property even after such a conversion. The bill also requires the landowner to continue to comply with the forest management plan requirements associated with the forested land being transferred.
A Package of Bills Addressing State Mandates. Another major component of the legislative agenda developed by the Legislative Policy Committee is a package of nine separate legislative initiatives that seek to repeal, modify, redesign or scale back a number of archaic, unnecessary or over-determined state mandates that create obstacles to the efficient administration of local government. As noted below, the package includes a couple of bills that address areas of law that are not state “mandates” in the technical or legal sense of that term, but nonetheless have the effect of creating unnecessary obstacles at the municipal level. The package includes:
State “Inspection” of Normal Boilers. This bill would repeal an archaic requirement for the municipalities and schools to have their boilers inspected by the State. No other businesses or places of public accommodation are required to have their normal-sized boilers inspected by the State.
Uniform Building Code Fix-up Legislation. A number of clarifications and fix-ups should be enacted in order to smooth-out implementation of the state’s uniform building code. One primary concern to municipalities is that there won’t be a sufficient number of “Third Party Inspectors” available to meet the private-sector inspection capacity necessary to keep this process from becoming a very significant municipal mandate. Among other changes, this bill eases that pressure by allowing municipal code enforcement officers to provide third party inspection services in communities that they are not serving.
General Assistance Accountability. Municipal officials do not believe that General Assistance (GA) resources should be provided to individuals who recently forfeited by their inappropriate behavior the same resources that were being provided through another social service program. That is already the case under Maine law for GA recipients already in the program, but it is not the case for the first time applicants. This bill would make the consequence of forfeiting public assistance resources the same for both “repeat” and “first time” GA applicants.
Less Expensive Newspaper Notice. The amount of money municipalities have to pay for mandated newspaper notice to the several daily newspapers is much higher than necessary to ensure quality public notice. That’s because the towns and cities are not allowed to meet state mandated notice requirements by putting the legal notices in less expensive “shopper notes” publications, even though the shopper notes are distributed to every single post office address (rather than just a few) and even though the shopper notes are entirely free to the citizens who receive them. This bill has been before the Legislature for at least 10 years without action. A version of this bill that applied to the newspaper notice mandates affecting state government was enacted by the Legislature in 2009, but successfully vetoed by Governor Baldacci.
Municipal Snow Dump Licensing Requirements. The rules governing who must get a license from the Department of Environmental Protection (DEP) to move accumulated snow to a “snow dump” provides some exemptions according to where the snow dump is located. However, many municipalities have no choice but to pay a licensing fee to the state to obtain permission to move snow from one place to another in order to facilitate the normal flow of traffic. This bill would expand those exemptions to include snow dump operations controlled by a municipality for the primary purpose of removing accumulated snow from public right of ways for the safety and convenience of the traveling public.
Authorized Use of Facsimile Signatures. Current law allows municipal treasurers to use facsimile signatures on certain forms that are filed in the county registries, but there is no express authority to use facsimile signatures on other forms that must be filed. Because some county registrars are refusing to file any forms with facsimile signatures unless the law expressly authorizes facsimile signatures, this bill creates the express authorization.
Expand the Authority to Pass the InforME-managed Rapid-Renewal Convenience Fees on to On-line Users. This is an issue that does not directly fall into the “mandate” category; it is more of an equity issue for municipal officials. A couple of years ago, state law was relaxed to allow municipalities to pass the credit card fees that are normally absorbed by the retailer along to the customer who wants to make a payment to the municipality by credit card. On a parallel track, the Information Resource of Maine system (InforME), which provides an Internet “gateway” for citizens to interact with governmental systems, allows motor vehicle owners to renew their motor vehicle registrations on-line provided their town or city has signed-up to allow for the InforME service. Under the InforME-based rapid renewal system, the municipality bears the cost of the convenience fee when customers renew their motor vehicle registrations with their credit cards, rather than the credit card user. The municipalities believe the “convenience fee” should be picked up by the person enjoying the convenience, not the other taxpayers.
Solid Waste rules as “major substantive.” Several years ago, a well-meaning resolve was enacted by the Legislature directing the Department of Environmental Protection to promulgate rules governing odor control and methane gas management at solid waste disposal facilities. According to that legislative directive, those rules were to be “routine technical” rules, which means that no subsequent legislative oversight would be necessary. As the draft rules began to be developed by the DEP, it became clear to municipal landfill managers that almost any municipal or commercial landfill, including some closed landfills, would become almost automatically non-compliant with the rules, and the steps necessary to achieve compliance were uncertain at best and unavoidably expensive. So that the municipal fiscal impacts will be more publically discussed before final adoption, this bill would re-establish these rules as “major substantive,” which means they must be finally approved by the Legislature rather than just the Board of Environmental Protection.
Street lights. The final bill in the “anti-mandate” category addresses an issue that is also not technically a “state mandate,” but is nonetheless a matter of considerable municipal frustration. Although the electric, telephone, Internet and cable television utilities are granted a blanket authority to use the municipal right of way to provide their various services, and although whichever company that actually owns the utility pole must rent the appropriate pole space to all the other utilities, the municipalities have no right to rent any space on those utility poles to affix municipal street lights. Instead, the provision of street light services is a monopoly enterprise controlled by the electric utilities in a manner that provides very few options and very little flexibility. This simple bill would provide municipalities with: (1) a right to rent the appropriate space on utility poles; (2) an opportunity to have greater say in the style of street light and the nature of lighting provided; (3) a direct influence with respect to the efficiency of the lighting provided; and (4) much greater flexibility when deciding to change where and when the street lighting is provided.
A catch-all category. Two bills incorporated into MMA’s legislative agenda by the Legislative Policy Committee don’t fall neatly into either the tax-policy category or the anti-mandate category.
Right to Know Law vs. the Rules of Discovery. The Policy Committee is also advancing a simple bill which adds an exception to the definition of “public record” within Maine’s Right to Know law to make it clear that parties engaged in litigation are bound by the Maine Rules of Court governing discovery and cannot use Maine’s Freedom of Access Law to end-run those rules.
Limits on firearms in places of legislative assembly. The title of the final bill in this overview of MMA’s legislative agenda for the 2011-2012 biennium will be entitled something like An Act to Provide Municipalities the Same Rights as the State With Respect to Restricting Firearms in their Capitol Areas. In substance, this bill does nothing more than give the legislative body in each municipality the home-rule right to adopt an ordinance restricting the carrying of firearms in that town or city’s essential municipal offices and places of legislative assembly, just as the State has reserved those restrictions for itself in its Capitol Area.
Conclusion. The 70 municipal officials who have been elected by their peers to serve on MMA’s Legislative Policy Committee put considerable time and effort into the development of this package of 16 bills. This is not a legislative package that places additional financial pressures on the state. It focuses, instead, on mandate relief, making the current laws mean what they say, and providing solutions to problems “on the ground”. MMA’s Legislative Policy Committee members hope the ideas for legislation they are bringing forward resonate with town and city leaders throughout the state, and the municipal community will ask their legislators to help sponsor these initiatives and see their way through to enactment.
Manchester's Town Manager, a stalwart member of MMA's 70-member Legislative Policy Committee for the last seven years, succumbed to cancer on Oct. 29. Mark was 50 years old. Mark's work for local government goes back nearly two decades. Previous to his service in Manchester, he served as the Treasurer for the cities of Augusta and Hallowell.
Mark brought a strong sense of commitment to his work on the Legislative Policy Committee. There are many reasons why Mark's deliberations and recommendations carried great weight when he addressed his municipal colleagues in debate. That long list would certainly include excellent preparation skills, a powerful dose of common sense, a dedication to mutual respect and fair play and an acute awareness of how governmental decisions affect regular people. The loss of Mark Doyon will be felt throughout the Capital Area where he lived and served, as well as the municipal community as a whole.