Maine's Cities, Towns Look For Ways To Deal With Lost Revenue

Aug 11, 2020

When it comes to financial security, conventional wisdom has it that municipal governments should develop sources of revenue on top of what they get from property taxes. Some of Maine's larger cities have done that well, but that has actually hurt them during the pandemic.

A souvenir store window display has a sign urging residents to hang in there during the coronavirus pandemic, Thursday, May 21, 2020, in Portland, Maine.
Credit Robert F. Bukaty / AP Images

City Finance Director Brendan O'Connell says Portland is one of the few places in northern New England that gets more than 50 percent of its revenues from sources other than property taxes.

“It's a blessing and a curse to have as many revenue streams as we do have.”

The curse is that, because of the pandemic, the city is estimating a drop of almost $12 million in non-property tax revenues for the coming fiscal year, many in the hospitality and travel sector. The estimated loss in cruise ship revenue is as much as $2.5 million for the upcoming fiscal year, with parking revenues down $3.2 million. Projected parks and recreation losses are another $2.5 million.

“The city owns a lot of entertainment venues: Merrill Auditorium, a gorgeous venue right here at City Hall, the Expo Center, Portland Ice Arena, Hadlock Field where the Sea Dogs play,” says O’Connell. “Nobody is coming to those venues, and we really don't know when people will be allowed to gather and people will feel safe gathering in large numbers. In addition the city is estimating a $1.5 million loss in state revenue sharing and a drop of $1 million in excise tax revenue.”

The city manager is proposing the elimination of 65 city positions, including 32 that were vacant. All city departments except human services are facing cuts.

While Bangor doesn't have nearly as many revenue streams as Portland, the city has also taken a hit because of the pandemic.

“The biggest drain on us is the Cross Insurance Center, and there is not funding available for municipal-owned facilities, so there's no direct funding to the municipalities, and that's going to be the area where we're going to be most vulnerable.”

Bangor City Manager Catherine Conlow is projecting millions of dollars in losses, including an estimated $800,000 decline in vehicle excise tax payments and a million dollars in state revenue sharing. Conlow says austerity measures were put in place before the close of the last fiscal year, including some layoffs at the Cross Insurance Center.

Conlow says right now a number of positions have been left vacant and some services curtailed.

And for cities and towns across the state, uncertainty has made it harder to plan budgets, says Eric Conrad of the Maine Municipal Association.

“We don't know how people are going to struggle to pay their property taxes. We don't exactly know what's going to happen with local general assistance requests. So some of those things are going to play out over the course of the next fiscal year, which we're in now but barely.” For one community in Kennebec County, however, the pandemic hasn't had all that much of an impact on local revenues. Winslow's interim Town Manager Paul Fongemie says he thinks the town actually ended up in the black.

“Our revenues have stayed fairly steady with what our projections were. They fell behind a little while when everything was closed, but they've pretty much rebounded. Most people have paid their taxes, most people have registered their cars. That's probably our two largest revenue streams.”

Fongemie says Winslow is not a service center and doesn't have a big box store or a large grocery store and isn't as dependent on people coming into town. He says that because Winslow has run a very tight ship for many years, the town doesn't have a whole lot of surplus to cut from its budget, and whatever money the town has lost in state revenue sharing might be made up by tweaking property taxes, rather than eliminating positions or cancelling projects.