Local Initiatives

Peru Takes On LD 1

Taxpayers everywhere want relief. But Mainers, more than most, may be entitled to it. Year after year the Tax Foundation has ranked Maine among the two or three most heavily taxed states in terms of the combined state and local tax burden as a percentage of per capita income. Hoping to reduce Maine's burden of 14% (compared to the national average of 11%), Governor John Baldacci in 2005 signed LD 1, a measure to limit year-to-year increases in public spending at all levels--municipalities, school districts, counties, and state. Any spending above the so-called Property Tax Levy Limit must be approved through an override vote.

When voters in the town of Peru act on a proposed 2008-09 budget by referendum on June 10, they will be asked by the Selectmen to override the LD 1 cap. Actually, the Selectmen nearly forgot to ask. When it was pointed out to the Board that the municipal budget would expand by 9.2% with passage of all articles, somebody said uh-oh! and called the Maine Municipal Association for guidance. Hence Article 3-A , a late insertion to the warrant that first appeared in the annual town report.

At a public hearing on May 29, the Selectmen justified a higher Levy Limit by insisting that the budgets for 2006 and 2007 were artificially lean and that you cannot run a town for so little money. I happened to chair the Board during those two cycles. So if anyone deserves scorn for holding the line, it is I. Never mind that the merger with SAD 21 was growing Peru's school spending by double digits annually, effectively starving the rest of the budget.

If Article 3-A and all subsequent spending articles are passed, the municipal budget for 2008-09 will reach $583,400. Together with an expected $1.3 million school assessment and a $76,853 county assessment, total appropriations will fall just shy of $2 million. The total tax commitment will come in at roughly $1.555 million, which, according to Selectman Jim Pulsifer, may raise Peru's mill rate from 14.3 to as much as 16.