(from Maine Townsman, March 2000)
by Linda Lockhart, Legislative Advocate, MMA
EDITOR’S NOTE: The following article is a condensed version of MMA’s 2000 Federal Issues Paper. Contributors to the FIP were Linda Lockhart, Geoff Herman and Kate Dufour of MMA’s State & Federal Relations department and Chris Lockwood, MMA Executive Director.
As Maine citizens and their municipal governments struggle with such issues as local property taxes, solid waste disposal options, and redevelopment of abandoned industrial sites, they wonder, "Is there any connection to the federal government?"
The answer is YES. MMA’s 2000 Federal Issues Paper explores the connection Maine’s critical issues have with the federal government – and more importantly, what the federal government might do to help address these issues in a positive manner.
A quarter century ago, the relationship might have been generally characterized as a partnership. The federal government established a range of programs and was a significant financial partner with state and local governments in addressing a wide range of domestic needs, such as creating pollution control and treatment facilities.
Now, the relationship is far less clear. In certain areas, such as transportation funding and community development, a fairly clear partnership continues. In other areas, however, the relationship has changed to consist of unfunded mandates (and significantly underfunded commitments, such as special education). In still other arenas, the federal government is undermining and preempting state and local authority and processes. At the same time, the global economy and technology revolution have potentially sweeping implications for the basic revenue structure supporting state and local services – education, public safety, and other vital local services.
Special Education Funding
The failure of Maine’s state and national leaders to honor past policies by adequately funding existing programs is particularly hard to understand in the context of extraordinary state and federal budget surpluses.
As enacted, the Individuals with Disabilities Education Act (IDEA) requires that the federal government pay 40% of the per-pupil cost for special education programs (20 USC § 1411), but in 1999 federal funding for special education remained at 7.2%. Since 1994 the federal government has only funded an average of 7% of the per-pupil costs of special education.
The failure of the federal government to meet its obligations forces the state to dishonor its promises as well. Although Maine law requires that the state pay 55% of the cost of education, in 1998 the state share was 44%. The balance of education costs, $49.1 million in 1998, must be born by those who contribute property taxes.
In 1998 the deficiency of federal funding in the area of special education cost each property taxpayer in Maine approximately $71.56. Since 1994 the shift to the property tax associated with the local share of special education has increased by 37%.
It is fundamentally important that Congress honor its prior commitments and fund special education at the level it committed to when it enacted the Individuals with Disabilities Education Act.
Brownfield Development and Federal Environmental Liability
Maine is several strides ahead of the federal government when it comes to providing opportunities for the redevelopment of abandoned industrial sites in Maine’s service center communities.
Between 1991 and 1996, the City of Bangor worked with Maine’s Department of Environmental Protection (DEP) and private developers to convert an abandoned coal gassification plant into a thriving supermarket complex. The City of Old Town has recently worked in a similar partnership to convert the old Lily-Tulip manufacturing site into valuable recreational and open space. With the help of some Brownfield Cleanup Pilot money from EPA, the City of Portland is beginning a project to rejuvenate at least 10 "brownfield" parcels in the East Bayside, West Bayside, and Parkside areas of the city. These are just a few of the many projects of this kind that developers could be seeking out if some pre-existing environmental liabilities could be definitely resolved.
Developers, and the financial institutions that back them, will generally follow the path of least resistance when it comes to choosing sites to develop. When the choice is between an in-town abandoned industrial or heavy commercial site with an uncertain environmental history or a cornfield in a neighboring suburb, it will be the "clean" suburban land that gets developed, pushing traffic, housing and water and sewer lines ever outward. The importance of a regulatory system that encourages brownfield development as a tool to counter inefficient land use patterns is well understood by developers, land use planners, and federal, state and local government. The obstacle to brownfield redevelopment, unfortunately, exists at the federal level.
Maine’s Voluntary Response Action Program (VRAP) allows anyone interested in the redevelopment of a brownfield site to enter into a partnership process with DEP. The party interested in redeveloping the abandoned site performs a site evaluation for residual pollutants. A remediation plan is developed to the satisfaction of DEP, and the department issues a release of liability giving assurance that the state will not prosecute the brownfield redeveloper for environmental violations associated with the pre-existing contaminants.
There is no comparable release of liability provided by the federal Environmental Protection Agency (EPA). Maine’s DEP has been able to negotiate with EPA for a so-called "comfort letter, " but the "comfort letter" is written so circumspectly it is often referred to as a "discomfort letter. When the City of Bangor participated in the private-public partnership that saw the successful redevelopment of the coal gassification plant, the city assumed the federal environmental liability, taking a risk that many private developers (and their financial backers) would not be willing to assume.
Our request is that Maine’s Congressional delegation help us persuade the EPA to become more a part of the solution by giving Maine’s DEP the authority to release liability and remove this unfortunate friction to urban redevelopment in Maine.
E-commerce/ Internet Taxation
The 19-member Advisory Commission on Electronic Commerce will provide its report and recommendations to Congress by April 21, 2000. Maine’s state and local governments are very concerned that the commission might recommend, or Congress might subsequently consider, federal legislation that would exempt from state or local sales and use taxation any retail transactions conducted over the Internet.
It is a simple question of fairness. There is no reason why a product that is purchased over the Internet or through a catalog should not be subject to the same tax treatment that is applied to the purchase of that identical product from a store on any Main Street in America. To enact a tax haven for Internet sales would create such an uneven playing field that the bricks-and-mortar retailers would be at a dangerous disadvantage. Congress should not forget that the stores we are trying to keep open and prosperous in our towns and cities are already subject to sales tax collection responsibilities, and pay property taxes as well. State and local governments rely on these revenues.
The municipalities in Maine have no authority to impose any sales taxes whatsoever, but local government is highly dependent on the fiscal capacity of the state to pay its fair share of the costs of K-12 education. In order to meet its obligations, the state needs a stable tax base. Many experts warn that it is not a far reach from an Internet sales tax exemption to the demise of the sales tax altogether.
The National Governors Association and various state and local public interest groups have come up with a plan that would phase in a comprehensive, voluntary and uniform system of sales tax administration. It is state governments’ challenge, after all, to address the weak mechanics inherent to the "use" tax, and the states have met that challenge with the Governors’ initiative. The Streamlined Sales Tax System for the 21st Century would eliminate for all retailers the burden of collecting taxes. "Trusted Third Party" administrators would be hired by the states to perform all collection administrative tasks. Uniform laws governing the administration of the sales tax would be developed that would have the effect of homogenizing exemptions, auditing procedures, and other administrative functions. States that would like to participate in the streamlined tax system would have to adopt the uniform collection laws.
Maine’s Congressional delegation can best help with the development of the streamlined sales tax system for the 21st Century by rejecting any attempt to bequeath tax exempt status on Internet transactions, and lending its endorsement and support to the efforts of the states to modernize sales taxation into the information age.
Maine’s highway system consists of 22,612 miles of roadway — 336 federal, 8,303 state and 13,862 local miles. Highway usage has increased from about 7.5 billion vehicle miles of travel in 1980 to over 13 billion miles in 1998. Unfortunately, 4,200 of the state’s road miles are in dire need of repair.
Congress can assist the State of Maine to maintain and make improvements to the road infrastructure in three ways: (1) through the federal highway-funding program, TEA-21, (2) by providing on-going support for alternative methods of transportation, and (3) by increasing weight limits on federal highways.
Over the next five years Maine will receive an average federal Highway Fund allocation of $124 million/year. Nearly two-thirds (65.5%) of Maine’s 1999 federal allocation was spent on surface transportation, the national highway system and for on-going interstate maintenance. The provision of the federal highway funding program guaranteeing states 90.5% of that state’s fuel tax receipts has benefited other states, but not Maine. The best avenue of securing additional transportation revenue for Maine is through dedicated special project funds. The FY 2001 budget should be carefully monitored to maximize every opportunity for earmarking revenues to the state, particularly in the areas of Border/Corridor programs (East-West Highway), historic covered bridges and transit programs for buses.
Maine’s political leaders have done well to secure funding for Amtrak services, particularly for the Portland/Boston train service. The Maine delegation will have an opportunity to support Amtrak’s FY 2001 budget, full funding of which is essential. The Maine Department of Transportation is hoping to obtain an $11 million appropriation in General Fund revenues to maintain the state-owned Calais Branch rail line and for the Lewiston/Auburn to Portland rail initiative and funding for the Lewiston to Portland initiative would allow for passenger service to Lewiston- Auburn along the St. Lawrence and Atlantic rail line.
Federal law attempts, but with exemptions and grandfathering provisions, fails to provide a uniform weight limit on the Interstate System. While 100,000-pound trucks can not travel on I-95 north of Augusta, they are allowed on the Maine Turnpike, all of I-95 in New Hampshire, the entire interstate network of Massachusetts, including the Massachusetts Turnpike, and many interstate highways of New York.
Maine needs federal action to relieve local streets of these heavier trucks. The 80,000-pound weight limit protects federal highways at the expense of local streets and the citizens who must share roadways and rotaries with these heavy trucks. The Maine Turnpike exemption granted by Congress was apparently controversial and its success was due to the diligent efforts of Maine’s delegation. Maine’s municipalities ask you to continue that diligence in developing rational interstate truck weight laws that work for Maine.
EPA Regs for Landfill Siting
Maine does not have a surplus of environmentally acceptable municipal solid waste landfill sites. Maine’s DEP has said that some of Maine’s wetlands with clay base may be the best sites, but their use is prohibited by federal EPA regulations. Maine needs the assistance of its Congressional delegation to require EPA to modify its regulations to allow siting municipal solid waste landfills in the most environmentally prudent locations.
Maine’s citizens and businesses generate over 1.6 million tons of municipal solid waste (MSW) per year. Forty-two percent is recycled, 40% incinerated, and 18% is disposed of directly in landfills. Each year, Maine imports 138,000 tons of MSW and exports 138,000 tons of MSW.
The future of special waste disposal in Maine is not secure. Four landfills, two public and two commercial, currently meet the demand to dispose of approximately 163,000 tons of Ash and 95,000 tons of Front End Process Residue (FEPR) produced by Maine’s four incinerators yearly.
Those 260,000 tons of special waste require approximately 210,000-220,000 cubic yards of landfill space each year. A proposed expansion at one commercial facility is the subject of current litigation. Consequently, remaining capacity at that facility cannot be accurately predicted. A state-owned facility, Carpenter Ridge, located in the unorganized township of T2 R8 and permitted in the mid-1990s, has yet to be developed. Capacity at Carpenter Ridge is 1.8 million cubic yards. It is likely that Maine will be forced to deal with selection of a new landfill site within the next decade.
As Maine considers approaches to the special waste landfill capacity problem, the state is likely to revisit a longstanding conflict between the environmental goals of groundwater and wetland protection, in terms of the state’s landfill siting criteria and the federal regulatory program for wetlands. A strong state regulatory program amply demonstrates Maine’s commitment to the protection of valuable wetlands from damaging development. Both the state program and the federal wetlands program administered by the EPA and the Army Corp of Engineers protect Maine’s wetlands. Additionally, Maine has enacted strict solid waste regulations to ensure that the development of landfills is accomplished in a manner protective of the public health, safety, and environment. Still, there are competing environmental concerns relating to groundwater protection and wetland impacts.
The siting, performance, and design requirements in Maine’s solid waste rules will frequently result in landfills that affect some small areas of wetlands. EPA has taken the position that solid waste facilities may not infringe on wetland areas unless it is demonstrated that certain extremely restrictive conditions can be met. Maine should not be required to meet EPA restrictions that were developed for entirely different soil and topographic conditions.
EPA should not foreclose Maine’s most environmentally sound approach to landfill siting by adhering to a regulatory scheme that fails to recognize Maine’s unique physical characteristics.
For over 25 years, Maine communities have looked to the Community Development Block Grant (CDBG) program to help revitalize low and moderate income neighborhoods, improve downtown business districts, promote economic development, rehabilitate homes and finance critical public facilities and infrastructure.
Funding for the state CDBG program has remained relatively stable for the past five years. After reaching a high water mark of $17.2 million in 1995 the state’s allocation has settled at or near the current level of $16.4 million.
While the overall inflation rate has been low through the period, construction costs have escalated dramatically in the past two years. Thus, despite ever-increasing needs, particularly in the extremely expensive and critical realm of water system improvements, we are accomplishing significantly less than we could five or six years ago.
In 1999, 10 communities received Public Facilities grants totaling $1.7 million. These grants were used to build piers, boat landings, access for the disabled in municipal buildings, a park, a therapeutic swimming pool, a fire station, and a dental clinic.
A total of $1.4 million in Public Facilities Grants was awarded to 11 municipalities in 2000 for fire fighting equipment, playground equipment, day care facilities, public works garages, fire stations, historic preservation, and community centers.
Thirteen communities received public infrastructure grants in 1999. The $4.3 million will help finance water line replacements, extensions of sewer lines, reservoirs, water/sewer/storm drainage, electrical system infrastructure, and a water filtration system.
In 2000, 15 communities were awarded $4.1 million for public infrastructure. These funds will be used for sewer line extensions, water line replacements, dam reconstruction, water and sewer improvements, road construction, downtown parking, storm drainage improvements, and a water filtration system.
Combined sewer systems collect sanitary sewage during periods of dry weather for conveyance to wastewater treatment plants. However, during wet weather events, combined sewers also receive storm water, which typically causes a hydraulic overload of the system triggering the discharge to receiving waters of untreated or partially treated wastewater through combined sewer overflow (CSO) outfalls.
Controlling or eliminating CSO discharges is an enormously expensive proposition that often requires communities to rebuild some or all of their sewer systems. CSO control programs generally pose the single largest public works projects in the history of almost every CSO community.
Since 1990, virtually every edition of Maine Municipal Association’s Federal Issues Paper has asked for our federal delegation’s assistance with the CSO problem. Each year, MMA urges Congress to enact legislation to allow the CSO problem to be addressed in the most cost-effective and expedient manner possible.
Legislation proposed for the 106th Congress’ consideration, the Combined Sewer Overflow Control and Partnership Act of 1999, would provide CSO communities with the flexibility and financial resources required to deal most effectively with this issue. This legislation would provide grants to municipalities for planning, design, and construction of facilities to intercept, transport, control, or treat combined storm and sanitary sewer flows.
Conservation & Reinvestment Act
When nonrenewable resources belonging to all Americans are used for private profit, a portion of the proceeds should be reinvested in assets of lasting value to the nation. That is the principle behind the collection of Outer Continental Shelf (OCS) mineral revenues that Congress traditionally shares with states and territories through appropriations. The OCS mineral revenues provided to the states should allow flexibility for targeted investments in state natural resource priorities, including coastal protection, restoration and impact assistance, park, recreation and cultural resources, and wildlife conservation and education.
Currently pending federal legislation, the revised Conservation and Reinvestment Act (CARA ‘99), would automatically set aside revenues from oil and gas leases on the Outer Continental Shelf for intended conservation purposes, instead of leaving it to Congress to appropriate annually. The set aside revenues would provide funding for the Land and Water Conservation Fund to provide matching funds to encourage and assist local and state governments in urban and rural areas to develop parks and ensure accessibility to local outdoor recreation resources.
The Land and Water Conservation fund, established in 1965, has funded $32 million in projects, including Popham Beach State Park, the Randall Road softball fields in Lewiston, the Presque Isle swimming pool, the Greenville Junction boat facility, Lake St. George boat access, and nearly 700 other projects around Maine. The fund has also helped protect land around Acadia National Park and Lake Umbagog National Wildlife Refuge. Maine recently passed a $50 million land bond to support the Land for Maine’s Future Program, demonstrating a sincere local commitment to preservation of land, water, recreation, coastal and wildlife conservation. CARA ’99 could provide an additional $3.9 million for state-side matching funds to stretch our own state dollars and $10.8 million for federal-side annually.
The Private Property Rights Implementation Act of 1999 (Takings Bill), H.R. 2372, would constitute a massive preemption of local home rule authority. H.R. 2372’s Senate counterpart, S. 1028, the Citizens’ Access to Justice Act of 1999, has the same goals and potential effect. These bills would permit landowners and developers to bypass local planning and appeals boards and state courts and take their land use grievances directly to federal court. Existing law requires that state courts review local land use decisions before a case is ripe for federal court.
Local citizens or their elected and appointed officials adopt ordinances, approve building permits and grant zoning variances in order to protect the property rights of all members of the community, not for the purpose of infringing on the property rights of a few. Maine has implemented a very effective mediation process to address takings claims, and it would be an act of arrogance for the federal government to preempt the effective review and appellate procedures that already exist at the local and state level.