EDITORIAL: Is this any way to make a budget?

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Even in a good year, Maine’s budget-making process seems backward, with municipalities and schools forced to formulate a spending plan before the state decides how much it is going to kick in.

And this is certainly not a good year.

Local budgets are typically first proposed by administrators in February or March. They are then usually taken up by a finance committee, then handed to the full school board, council or board of selectmen for approval, sometime from May to mid-June. In some cases, a municipal budget goes for a final vote at town meeting. In all cases, a validation vote is necessary to finalize the school budget.

Every other year, the Legislature at the same time is haggling over the state’s two-year budget, with the aim of having it in place by the start of the fiscal year July 1. The state budget is a political football, and legislators will in the best of economies use all the time available to get what they want.

In what amounts to the worst of times, like this year, when a tight budget coincides with a highly partisan Legislature and an obstinate governor, it could push past the deadline. Gov. LePage has proposed in his budget that the state cut the revenue sharing and business equipment tax rebates that go to municipalities, and that local school systems take on more of the cost of teacher retirement. He has also proposed changes to the homestead exemption and the transfer of commercial excise taxes from towns to the state, raising the ire of local officials and many legislators. Some have even brought up the specter of a government shutdown, such as the one that happened when a new budget could not be agreed upon in July 1991.

All of this means that school, city and town officials across the state are busy reviewing budget proposals affected by five years of slow economic activity, and they are considering these plans without knowing if a significant portion of their funding will be available.

“It is like rolling out the budget with blinders on,” said Gorham Superintendent Ted Sharp, who was referring to the question marks surrounding school funding, but could have been talking about the process as a whole.

Everyone is dealing with this uncertainty in their own way. The initial city budget in South Portland assumes there would be no cuts in municipal funding. So does the mayor’s budget in Westbrook.

“If everything the governor proposes is implemented, that’s a game changer,” said Westbrook’s city manager, Jerre Bryant.

Windham, which must have its budget done for town meeting in mid-June, is assuming the state funding is a goner, and recently laid out the significant cuts that would result, including eliminating a police officer and an animal control officer, closing two town parks, cutting curbside recycling and slicing the planning department.

In Scarborough, Town Manager Tom Hall is taking a different tack. The first municipal budget included no cuts in revenue sharing, but it does assume the switch in commercial excise taxes.

“Revenue sharing touches every community in Maine, some more than others, but everyone. That seems to be a loser based on the legislators I’m talking to,” Hall said last month. “[The commercial excise tax shift], just because there’s so few of us affected, stands a better chance of getting through the legislative process.”

The crystal-balling forced by the budget process means at least some of Maine’s municipalities will be scrambling come July, either to make up for lost revenue or to refill positions cut in anticipation of a loss in state funding that never materialized. Maybe that’s just the way it has to be this year. Maybe it is just a once-in-a-while situation caused by the economic downturn.

Or maybe it is sign the system has a flaw, one that could be eliminated with the change of just a few deadlines.

Ben Bragdon is the managing editor of Current Publishing. He can be reached at bbragdon@keepmecurrent.com or followed on Twitter.

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