BELFAST - In his office late last week, City Manager Joe Slocum pulled a calculator across his desk and produced a spreadsheet of the city budget.

A day earlier, he had attended a six-hour public hearing on proposed cuts to state’s Municipal Revenue Sharing program. He was exhausted, he said. Still, it didn’t take long for him to come up with an illustration of why he went, and how much is still be at stake.

“The fire department, our clerks office and the parks department,” he said. “The amount of funding we’ve lost since 2007 is the total operating cost of those departments. It’s a lot of money to lose, and municipalities are really upset by that.”

Slocum was one of roughly 60 town and city officials in Augusta last week who testified in support of LR 2721. The bill that would prevent a major cut to the state’s Municipal Revenue Sharing program, which entitles municipalities to a portion — historically 5-percent — of proceeds from the state’s sales, service provider, personal and corporate income tax receipts.

During the past decade, the local share has been cut by more than half. The legislation being discussed last week, LR 2721, would slow but not stop the decline. 

In 2007, Belfast got around $900,000 in Municipal Revenue Sharing to offset the city’s $8 million budget. This year, Slocum said, the city received roughly $335,000.

According to figures from Maine Municipal Association, Belfast’s share would drop to just over $100,000 unless LR 2721 is enacted, and other towns and cities would be affected similarly.

Belfast city officials have managed retain most services despite the cuts, on the eve of municipal budget deliberations for 2014-15, Slocum said the loss of any more money from Municipal Revenue Sharing would be difficult to absorb.

“I can’t tell you that we can do the same thing with less money,” he said.

Slocum’s description of cuts to the Municipal Revenue Sharing program as a “loss” is not political spin. The 40-year-old program predates the tenure of most municipal officials and has remained consistent for most of its history. That changed in the mid-2000s, when the state began to whittle away at the local share. In 2010, the cuts became more dramatic, and last year Gov. LePage unsuccessfully proposed eliminating the program entirely.

The final draft of the budget, approved last June, included $60 million for revenue sharing. It also included a clause that would automatically redirect $40 million of that money to the state’s general fund if an equivalent amount was not raised through alternative tax increases.

The provision took municipal officials by surprise according to a bulletin distributed by Maine Municipal Association last week.

LD 2721, introduced in the legislature’s second session, would keep the original $60 million appropriation intact and seek to make up difference by eliminating several business tax exemptions.

Removing the exemptions would ostensibly hurt businesses, but the either/or dilemma may be self imposed.

In talking about the general scarcity of state money in recent years, Slocum pointed to a slate of tax cuts promoted by Gov. LePage and adopted as part of the state’s budget in 2011. Supporters argued that the cuts, which total $400 million over two years and come primarily from income and estate taxes, would encourage investment in Maine.

Slocum said he has not seen that happening and doesn’t expect to.

“Where are all those wealthy people who are not paying taxes anymore who are investing?” he said. “Where are these $100 million babies? They don’t exist.”

Slocum said the top-down strategy was likely pushed by political groups outside of the state that don’t understand the value and role of local government in Maine.

Unlike much of the country, Slocum said, municipalities in Maine have real jurisdiction and officials are generally approachable. He argued that this has been more valuable to businesses than the state’s gamble on residual benefits from tax breaks.

“I’ve been here [as Belfast city manager] for seven years and I can’t think of an economic development event that’s happened because someone from Augusta came and said, ‘We’ve got good news for you.’ It’s been the other way around,” he said.

When it comes to generating their own revenue, however, municipalities have limited options. Towns and cities cannot institute new taxes. When a source of revenue goes away, as it has with Municipal Revenue Sharing, the choice is typically between raising property taxes and reducing services.

Cutting from the budget is tricky, Slocum said, because many of the services provided at the local level are either essential for public safety (police, fire, ambulance) or required by the state.

“We can’t not sell licenses,” he said. “We can’t not register cars, and plow roads, and assess properties.”

Any bid for a property tax increase would have to compete with hikes coming from local school district and county government. In Belfast and the surrounding towns of Regional School Unit 20 the increase coming from the school district alone has been on the order of 10-percent for the past three years.

School officials and others have argued that those have also come indirectly from the state, as costs have been pushed down to the local level.

If the state’s goal is to support business, Slocum said, raising property taxes isn’t going to help. Likewise, he said, trying to cut costs by deferring road and building maintenance — a route he said municipalities could take in a pinch — would not be good for anyone.

“That’s the worst economic development news you can have,” he said.

Ethan Andrews can be reached at news@penbaypilot.com