AUGUSTA, Maine (AP) - Maine legislation that prevents $40 million in cuts to state aid for cities and towns next year became law Wednesday after Gov. Paul LePage took no action on it, the Republican governor’s office said.
The law takes effect 90 days after the Legislature adjourns in April.
The measure has been a source of contention in the Democratic-controlled Legislature since cities and towns have faced significant cuts over the last several years to revenue sharing.
Maine’s municipalities typically received 5 percent of all state sales and income tax revenue, which would have been $138 million this year, according to the Maine Municipal Association. But without this extra money, the municipalities would have received only $20 million next year, the association said.
Democrats, who’ve heavily advocated for the bill, praised its passage into law.
“Our communities count on this funding to keep our schools open and our streets plowed, and they count on the legislature to keep its promise and deliver these funds,” Democratic Senate President Justin Alfond said in a statement Wednesday. “Today, we have kept that promise.”
Mayors and town managers begged lawmakers to prevent the cuts they said would result in steeper property taxes, but GOP lawmakers and LePage’s administration said the way the bill was funded was financially irresponsible.
Despite the opposition, many Republicans joined Democrats in voting for the bill’s passage. Administration officials originally suggested LePage likely would veto the bill, but the measure would almost certainly have had enough support to override his veto.
The biggest source of LePage’s opposition was the plan to take $21 million from a rainy day fund - a reserve of money that’s used in the event of budget shortfalls and emergencies - leaving the fund with about $38 million. His office says that will hurt the state’s bond credit rating.
In an email to State Treasurer Neria Douglass last week, LePage said he wouldn’t go to market with bonds until $60 million is in the rainy day fund, even though his administration signed a financial order last year authorizing $69.7 million in funding for projects that the state is supposed to pay back by selling bonds this June.
Democrats have dismissed the notion that taking money from the rainy day fund would damage the state’s bond credit rating and noted that the LePage administration took $27 million from the fund in 2011 to balance a budget that included $400 million in tax cuts.
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