MEASURE TO INCENT SHARED SERVICES AND INTERLOCAL AGREEMENTS SEEKS TAXPAYER SAVINGS
AUGUSTA – A measure to incentivize municipalities to enter into cooperative agreements for shared service was introduced at a public hearing today in the state’s Taxation Committee.
“This concept would provide a strong financial incentive for municipalities to join into collaborative partnerships for services without any additional appropriation from the state,” said Democratic State Senator Nate Libby of Lewiston, the sponsor of the bill. “It would also reward municipalities that have been working collaboratively for years to reduce costs to the local taxpayer.”
Sen. Nate Libby of Lewiston
The measure, LD 646, “An Act To Provide Incentives for Municipal Cooperation and Shared Services,” would work similarly to a TIF district by providing benefit to municipalities by sheltering property value from the state’s calculation of revenue sharing and general purpose aid to education, and the county tax.
During Sen. Libby’s testimony before the committee, he explained the mechanics of the bill, like this:
WHO: Town A (pop. 10,000, mill rate $0.020) and Town B (pop. 5,000, mill rate $0.015) operate two separate public works operations.
WHAT: They decide to pursue a joint public works operation costing $900,000 after LD 646 has become law.
HOW: In their interlocal agreement, the towns decide how to apportion costs in a way that makes sense for them. In this case, they apportion the costs of joint public works by population.
IMPACT-COST: The combined $900,000 public works operation will be split: Town A pays $600,000 and Town B pays $300,000.
IMPACT-SAVINGS: To determine how much town valuation will be sheltered, Town A’s cost of joint public works, $600,000, divided by the local mill rate, $0.020, equalS $30 million in value sheltered. Town B would shelter $20 million.
Municipal leaders, the Mayor’s Coalition, and Grow Smart all testified in support of the measure.
The Taxation Committee will hold a work session on the measure in the coming days.
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