Maine Cities And Towns On Track To Lose $146M In Revenues In 2020, MMA Projects

Aug 3, 2020

As Congress and the Trump administration haggle over a new coronavirus relief bill, the organization representing Maine's municipalities is projecting cities and towns will see a combined revenue loss of $146 million this year because of the pandemic.

The revenue loss projections stem from a survey of 85 communities by the Maine Municipal Association (MMA).

Survey participants reported nearly $29 million in lost tax revenue from the beginning of the pandemic in early March to the fiscal year that ended June 30. Those same participants expect to see $25 million in losses from July to the end of the calendar year, leading the MMA to project a $146 million revenue loss across Maine's nearly 500 municipalities. The MMA warned that those projections could be conservative because some larger communities did not participate in the survey, even though they’re the ones hardest hit during the pandemic.

Losses stem from declining revenues that typically bolster municipal budgets, including licensing fees, local taxes and the statewide sales and use tax, which is shared with local governments.

Kate Dufour, the legislative director for the MMA, told the Legislature's Budget Committee Monday that many communities are considering program cuts and tapping surplus accounts to make up the difference. But Dufour says those fixes are temporary.

"So this is incredibly important to some of the conversations you had this morning, encouraging the federal government not only to provide direct relief to communities, but to relax those strings so that it's not just for (COVID) expenditures, but we can actually kind of replace those revenues that we are losing because of COVID," Dufour said.

Democrats in Congress are pushing for $1 trillion in aid to local governments in the next COVID relief package, but the Trump administration has said that request is a non-starter in negotiations.

Updated 3:24 p.m. August 3, 2020