After much ado and drama, including a brief and not-so-painful shutdown, the 2018-19 biennial budget was adopted by the House and Senate and signed into law by Gov. Paul LePage at dawn on the Fourth of July. The fireworks were over.
Much of the news coverage focused on initiatives included in the two-year funding package. Less attention was devoted to the measures that were negotiated out of the compromise budget bill. In many instances, what was undone is as important as what was done. A few examples:
The proposed increase in the lodging tax rate from the current 9 percent to 10.5 percent, which evolved from no big deal to a major poison bill and helped precipitate the shutdown, was dropped. This one is a puzzler: the increase would be borne largely by tourists. While soaking our guests might be inhospitable and short-sighted, 1.5 percent would not have been unduly burdensome.
Revenue sharing to municipalities was a candidate for a permanent reduction. Under the initial proposal, the amount of state sales and income tax revenue distributed to towns and cities would have been permanently cut to 2 percent. Though revenue sharing has undergone a reduction, state law now is on course to restore the program to 5 percent. Good news for the towns.
The new budget excludes proposed changes to the General Assistance program that would have made assistance to certain non-U.S. citizens ineligible for state reimbursement. This budget also did away with the governor’s proposed limitations on who would be eligible for Temporary Assistance to Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP) and Supplemental Security Income (SSI). Not an easy call, but LePage’s original proposal was too sweeping and, frankly, uncharitable.
Repealed in a spirit of compromise was the damaged-from-the-start citizen initiative stipulating a 3 percent surcharge on the portion of taxable incomes in excess of $200,000. The proceeds were to go toward funding K-12 education. In its place, lawmakers agreed on an additional $162 million for K-12 education over the biennium. Like they said: a compromise. Applause.
One of the more promising initiatives that was voted in – not out – was an amendment to the formula that previously included funding for 50 percent of the costs of school system administration (read: superintendents) in the calculation of the state’s share of K-12 education. Going forward, school systems now have an incentive to either regionalize or improve outcomes. The state share of administrative costs will be calculated on a per-pupil basis, with an incrementally increasing portion of state support going to regionalized administrative services. Starting with fiscal year 2021, only school administrative units that have consolidated administrative services or are identified as high-performing, efficient school administrative units will be eligible for system administration money from the state. Good move. How does it differ from Gov. John Baldacci’s ham-handed push for school consolidation in 2009? It comes from both chambers and both sides of the aisle, not at the point of the governor’s budget sword.
The one sour – if perennial – note is that the official estimates of General Purpose Aid to education in Maine’s cities and towns was not released until July 21, three full weeks after most towns started the new budget year.
We understand that the state Department of Education had to ensure that the amount posted for each school administrative unit was accurate. The trouble is that most Maine municipalities needed that information months ago. Most municipal and school budgets for the fiscal year 2017/2018 already have been adopted.
The legislature that finds a way to settle school funding in a timelier manner, so that administrators aren’t flying blind, will have performed a heroic service.