By Joe Bruno
State Representative
District 38
Raymond & Part of Windham
3/12/2001

It is the middle of March and serious budget negotiations are beginning so that we can get the budget passed by the end of the month. The legislature does this so that towns will have some idea of what they can expect from the state in terms of general-purpose aid for education, the largest piece of municipal budgets. The legislature received the latest report from the Revenue Forecasting Commission that increases our revenue shortfall to over $300 million. The legislature and the governor must now come up with a balanced budget as directed by our state constitution. Let’s look at the proposals put forth by the governor.

The governor has proposed increasing the meals and lodging tax for non-class A restaurants from 5 to 7 percent. A class A restaurant is one that serves liquor on the premises. Currently, if you eat a chain restaurant that doesn’t serve alcohol (McDonald’s, Burger King, Wendy’s) the sales tax is 5%. If the legislature accepts the governor’s proposal you would pay a 7% tax.

Another tax increase that is being proposed is to increase the cigarette excise tax from 74 cents to 1 dollar per pack, a 35 percent increase. This increase would be used for the shortfall, not for expanding programs. There are other bills submitted that would increase the tax even more to fund expansion of programs.

Many people who are in the state retirement system are concerned about the re-amortization schedule increase. The proposal is similar to re-mortgaging your home and extending the payments a few more years to pay a lower rate. Under current state law the unfunded liability must be paid off by the year 2028. If we re-amortize it still allows us to pay off the unfunded portion by 2024, still ahead of the statutory date but with a price tag of 778 million dollars in increased interest paid.

General-purpose aid is scheduled to increase by 5% the first year and 3% the second year of the budget. Under discussion is also adding 5 million dollars in what is known as a cushion, so that schools would not receive any less than they did last year. I strongly support this because the schools in southern Maine have seen rising property values which leads to less aid from the state. Adding a cushion would help the towns that I represent. The state’s commitment to k-12 education would amount to over 1.4 billion (with a b) dollars in this budget.

Other discussions in the budget involve the technology endowment, taking money from the Rainy Day fund, higher education, the use of tobacco money to plug the hole due to Medicaid expenditures, restraining growth in Medicaid using various techniques such as prior authorization and not beginning programs authorized by the last legislature. Next November you will also be asked to vote for bonds totaling over $100 million.

I seek your input on all these proposals. If you need more information on any of these issues please contact me via e-mail at jbruno1@maine.rr.com , phone 655-7443(home), 287-1440(state house), or write to 168 Egypt Rd, Raymond, ME 04071. Your comments allow me to represent you better.