Maine cities and towns could lose $146M in revenue by 2020’s end due to virus
AUGUSTA — Maine cities and towns are expected to lose a collective $146 million in revenues due to the coronavirus pandemic by the end of this year, according to a projection released Aug. 3 by the Maine Municipal Association.
It came from a survey of 85 municipalities of varying sizes conducted from end of June to about mid-July, with results still coming in, lobbyist Kate Dufour of the association told Legislature’s budget committee. She noted some service centers — shopping and employment hubs that support populations larger than their own — had not yet responded.
The grim news comes as Congress struggles to pass another federal relief bill. House Democrats passed a massive bill in mid-May, but Senate Republicans introduced their plan just last week. The latter plan does not include additional aid for states and local governments.
Gov. Janet Mills, a Democrat, has joined governors and lawmakers of both parties to argue for more flexibility in how money from the $2.2 trillion relief bill passed in March is spent, saying provisions limiting use to directly virus-related costs and not to offset revenue losses will hurt communities.
That is entirely possible, according to the Maine Municipal Association survey: Over two-thirds of responding communities said they will turn to program cuts, fund balances or a combination of the two to offset losses without additional federal relief.
Only 23 percent of lost revenues are expected to be recovered, Dufour said, because things like excise taxes and motor vehicle registrations delayed by the pandemic will have to be paid eventually. Money gained from sources like parking or cruise line fees has largely dried up.
The state is also expected to decrease the amount of revenue sharing to municipalities this year due to the pandemic, as the funding stream is dictated by use and sales tax revenues that have plummeted in the last four months.
It could drastically affect some communities. In Bethel, an influx of out-of-state tourists and home buyers seems to be keeping coffers steady for now, said Town Manager Loretta Powers. She said the town had 98 percent of projected revenues when the books closed in late June.
“People have changed their five-year plans to now,” she said. “They figure if they’re going to be stuck at home, they’d rather be stuck out here.”
The lost revenue is expected to outpace the expected costs of the virus, according to the survey’s results. The association is projecting a statewide cost of $24 million due to expenses like election modifications, social services and technology needed to navigate the pandemic.
Only a few communities reported applying for Federal Emergency Management Agency aid, with some saying the application process was too difficult to complete. Others said they did not expect to generate the minimum amount of expenses needed to qualify. Almost 40 percent said they applied for other relief programs.