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Maine Budget Highlights, Emergency Bills and More - Jun. 26, 2019

   From MMA’s State and Federal Relations Department Staff

What follows is an update on legislative issues of municipal interest that were decided before the legislature adjourned last week.  A complete overview of the 2019 session, including a description of all newly enacted laws, will be published in the August/September edition of the Association’s Maine Town & City magazine.  If you have questions about these updates, please contact Laura Ellis at lellis@memun.org or 1-800-452-8786 and she will connect you with the appropriate staff member.

 

            Thank you.

 

Adjournment

In the early morning hours of June 20, the Legislature officially adjourned its first year of the biennial session. Although technically recessed until January 2020, it is highly probable that members of the House and Senate will reconvene for a special session later this year to finalize a bond package for approval by voters at the Nov. 5 referendum election.  Although LD 1836, An Act To Authorize a General Fund Bond Issue for Infrastructure, Economic Development, Workforce Development and Energy and Environment, containing four separate bond proposals  was advanced, the Legislature was unable to reach an agreement on package that would garner the required two-thirds majority vote. 

 

Binding Arbitration

            To paraphrase an iconic Beatles’ song, the Association got by with a lot of help from its public employer friends regarding the demise of LD 1177, An Act to Improve Public Sector Labor Relations.  The bill, which was supported in both the House and the Senate, was successfully vetoed by Governor Mills.  As proposed, the bill would have made public sector employer/employee negotiations over salaries, retirement and insurance benefits binding in the process of arbitration.  Currently, the final decision on these fiduciary responsibilities rests with duly appointed and elected representatives of the Maine’s university and community college systems, municipalities, counties and schools.         

 

Municipal officials from across the state, as well as the Association, greatly appreciate the governor’s willingness to entrust public employer partners with the authority necessary to continue to make decisions that are in the best interest of the state’s taxpayers.

 

Budget Highlights

            The two year budget proposal (LD 1001) adopted by the Legislature and signed into law by Governor Mills on June 17, includes several property tax relief measures.  Of greatest municipal significance, the FY 2020 – FY 2021 General Fund budget:

 

·         Revenue Sharing.  Increases the amount of revenues shared with municipalities under the state/municipal revenue sharing program from the current 2% of state sales and income taxes to 3% and 3.75% in FY 2020 and FY 2021, respectively.  Updated revenue sharing projections for FY 2020 at the 3% distribution rate are now posted on the Treasurer’s website.

 

·         Homestead Exemption.  Beginning on or after April 1, 2020, increases the value of the homestead exemption from $20,000 to $25,000 and provides full reimbursement for the $5,000 increase by adjusting the state’s reimbursement rate from 62.5% to 70%.

 

·          Property Tax Fairness Credit. Changes the formula for calculating the property tax fairness credit to expand the credit to residents whose property taxes or rent constituting property taxes on homestead property exceeds 5%, rather than 6% as provided for in current law, of the residents’ income for tax years beginning on or after Jan. 1, 2020.  

 

·         K-12 Education Funding.  Calculates at $2.29 billion under the Essential Programs and Services (EPS) model, including the normal cost of teacher retirement, as necessary to fund K-12 education in FY 2020.  The state’s proposed contribution to those costs is $1.16 billion, accounting for 50.8% of total expenditures.

The budget allocates an additional $224 million as the state’s share of the total unfunded actuarial liabilities (UAL) of the Maine Public Employees Retirement System that are attributable to teacher and retired teacher health and life insurance benefits.  The UAL appropriation brings the total spending for K-12 education to $2.52 billion, with the state’s $1.39 billion appropriation accounting for 55.2% of total expenditures.

 

For FY 2020, the minimum local share for the cost of funding K-12 education is $1.13 billion and the mil rate expectation is 8.28, both of which represent a reduction in local costs from FY 2019.

 

Between FY 2019 and FY 2020, state contributions to K-12 education, excluding UAL, grew by $48 million or 4%.

 

·         Minimum Teacher Salary.  Increases the minimum salary for certified teachers to $35,000 in school year 2020-2021, $37,500 in school year 2021-2022 and $40,000 beginning with the 2022-2023 school year.  A school administrative unit is required to provide the Department of Education (DOE), annually, with the number of teachers eligible for the increase.  Based on that information, the department is required to provide the revenues necessary to fund 100% of the incremental salary increases.

 

·         Public Preschool Programs.  Extends, from the 2018-2019 to the 2023-2024 school year, the timeframe to provide adequate start-up funding to allow all school administrative units to provide public preschool programs for children four years of age.  DOE is tasked with reporting back to the Legislature by Jan. 1, 2020 a plan to meet the public preschool program goal, as well as to make recommendations for program standards, process for approving programs not operated by a school administrative units and funding for a public preschool program. 

 

·         Special Education Services.  Authorizes the Legislature, through the Education Committee, to contract with a qualified research and technical assistance entity to conduct an independent review of Maine’s early childhood special education services.  The research entity is tasked with designing a step-by-step implementation plan for the transition of special education services for children from birth to three years of age to DOE and for children three to five years of age to local school administrative units.

 

·         Phone Surcharges.  Beginning Jan. 1, 2020, requires the Public Utilities Commission to establish the statewide E-9-1-1 surcharge and prepaid E-9-1-1 surcharge, but limits the surcharges to no more than 35 cent per month per line or number, which is 10 cents less than required in the current law.  Beginning Jan. 1, 2020, imposes a surcharge of 10 cents per month per line or number for the ConnectME Fund and requires the assessment and surcharge to be collected from customers on a monthly basis.

 

·         County Jail Funding.  Includes a one-time allocation of $3 million in each year of the biennium to the Department of Corrections, County Jail Operations Fund for county and regional jails to offset the unusually high jail costs, resulting in a total appropriation of $18.4 million in both FY 20 and FY 21.

 

Marijuana Revenue Sharing

Although the Association’s platform legislation LD 335, An Act To Require the State to Distribute 12 Percent of Adult Use Marijuana Retail Sales and Excise Tax Revenue to Generating Municipalities, was passed to be enacted (by a margin of 88 to 54 in the House and with no roll call in the Senate) at the very end of session, it has been carried over on the Appropriations Table to next year’s legislative session, pending funding.

 

Unfortunately, ordinary fiscal note drafting rules resulted in the legislation appearing to impose a significant new cost for the state. Of course, the bill is all but guaranteed to open the door to new revenues for the state, not the other way around.

 

The reason the bill will lead to increased state revenues is two-fold. First, only communities that opt in to allow adult use marijuana businesses will generate new revenue for the state. The state receives zero revenue from municipalities that do not opt in. Second, Maine’s municipalities, even those who are proponents of legalization, generally are not inclined to opt in if it is going to create a new hole in their budgets.

 

The Association is currently aware of only 13 municipalities (out of 488) that have opted in to allow some or all of the four types of non-medical marijuana businesses. Maine is the only legalizing state (of ten nationwide) that does not provide an avenue for its local governments to receive a return on investment in the new adult use industry, or even to recoup their costs, for that matter. The question ought to be how much revenue to return to generating municipalities, not whether a share is appropriate. The Association believes the roughly 10% effective rate provided by the Taxation Committee’s amendment to LD 335, compromised down from the 25% requested by MMA’s Legislative Policy Committee, is entirely appropriate.

 

Meanwhile, the state met its own chief marijuana objective for the session, implementing the legislation approving the administration's new Office of Marijuana Policy (OMP) rules that will govern adult use operations. From a municipal perspective, the rules incorporate the most important pieces of statute relative to the interplay between state and local regulations. For instance, the rules include measures for the state to develop a local compliance certification form that it will make available to municipal officials, and a new requirement that business operators report into the state "seed-to-sale" tracking system each municipality where they are growing, altering, selling, or disposing of their product. With the rules approved, OMP is poised to begin licensing adult use businesses as soon as this autumn.

 

Yellow Flag

LD 1811, An Act To Enhance Personal and Public Safety by Requiring Evaluations of and Judicial Hearing for Persons in Protective Custody Regarding Risk of Harm and Restricting Access to Dangerous Weapons, the so-called “yellow flag” law, allows an individual placed in protective custody by law enforcement to be evaluated by a mental health professional, including through the use of telemedicine, to determine if the individual possess a threat to themselves or others and whether the individual should possess “dangerous weapons.”  While the bill, which was enacted on last day of the legislative session, takes a good first step toward protecting individuals in crisis from harm to self or others, there are many provisions in the law that may be challenging to implement and increase confrontational risks.

 

Coupled with a professional assessment that an individual should not, for the short-term, possess dangerous weapons, the complainant agency is required: (1) to seek judicial endorsement of the prohibition to possess “dangerous weapons” from a justice of the peace, probate, district court, or superior court judge; (2) once authorized, notify the individual of their prohibitive status, request that the individual voluntarily turn in their “dangerous weapons” and inform the individual of the restriction from obtaining additional weapons; (3) notify the Department of Public Safety of the temporary order; (4) make arrangements for the voluntary surrender of subject items to the agency of residential jurisdiction or facilitate the storage of the items with trusted parties; (5) notify the individual of their right to a hearing within 14 days to determine if the initial prohibition was appropriate and needs to be extended; and (6) if the individual does not comply with the order, obtain a warrant to seize weapons that are not turned in.

 

Unlike the “blue paper” or involuntary committal process, where the individual is detained in a secure healthcare environment once identified, the subject of the yellow flag law is likely to be released, even if the person still poses a recognized threat to themselves or others, which causes them to be subject to the new restrictions. Without a system of identifying individuals subject to the restrictions in place, the purchase of additional weapons is possible.

 

           While the Judiciary Committee believed it was amending the law to mirror existing procedures under the “blue paper” and protection from abuse order weapons restrictions, those laws specifically call out firearms as the prohibited items to surrender. However, the new law restricts the possession of “dangerous weapons” which could include a chainsaw, steak knife or gun depending on context. The use of the broad-based term “dangerous weapons” combined with the lack of immunity for law enforcement regarding foreseeable harm for leaving a variety of potential weapons behind, leaves much to interpretation for responding officers.

 

The committee also stripped out what they perceived to be the overt municipal mandate in the printed bill by allowing confiscated weapons to be stored with a neighbor or trusted family member outside the residence of the individual, rather than with a law enforcement agency.

 

If the law is to achieve its purpose, there will need to be significant investment in the federal, state and local interdepartmental notification and communication systems to reflect the transient nature of such incidents, particularly when they occur outside an individual’s home community. The law will not take effect until July 2020, as there is no system in place right now that is designed to manage the number of notification requirements between medical providers, state, county and municipal law enforcement agencies. While individuals subject to these restriction may eventually be able to be flagged for federal firearms background checks, there is nothing stopping an individual from purchasing any of the other possible dangerous weapons that could be prohibited under the new law.

 

Workers’ Compensation Act Changes

            Without debate in either the House or the Senate, the Legislature enacted an amended version of LD 756, An Act To Improve the Maine Workers’ Compensation Act of 1992.  The Association’s Risk Management Services staff is working on a detailed description of the newly amended law, which will be published in the July 2019 edition of the Maine Town & City magazine’s Risk Manager. 

 

Effective Date of Emergency & Regular Legislation

Bills enacted with an “emergency preamble” become effective on the date the governor signs the legislation into law.  In contrast, non-emergency initiatives are effective 90 days after the final adjournment of the Legislature, which for this year is September 19.   The list of bills that follow were enacted with the emergency preamble and are now effective law, which can be accessed by clicking on the hyperlink provided with the citation.  A full description of these bills as well as non-emergency legislation will be published in the Association’s Augusta/September Maine Town and City magazine.

 

Six of the emergency bills have yet to be signed by the governor, those LDs are:  945, 1036, 1116, 1679, 1708 and 1815.

 

The bills of municipal significance that have been signed into emergency law are:

 

LD 19: An Act To Require Newly Purchased Public School Busses To Be Equipped with School Buss Crossing Arms. Emergency Enacted; PL 2019, c. 413 (6/20/19)

 

LD 59: An Act To Permit Plantations To Fill Vacancies of Town Officials. Emergency Enacted; PL 2019, c. 18 (4/5/19)

 

LD 180: An Act To Allow for the Regulation of Transportation Network Companies at Airports by Certain Municipalities. Emergency Enacted; PL 2019, c. 78 (5/8/19)

 

LD 212: An Act To Provide a Source of Funding for the ATV Recreational Management Fund and To Establish the ATV Enforcement Fund. Emergency Enacted; PL 2019, c. 75 (5/01/19)

 

LD 309: Resolve, Directing the Department of Education To Direct a Study of the Regional Adjustment for School Administrative Units. Emergency Passed; Resolves 2019, c. 70

 

LD 534: An Act To Make Ballot Questions Easier To Read and Understand for Maine Voters. Emergency Enacted; PL 2019, c. 414 (6/20/19)

 

LD 630: An Act To Clarify That Food, Food Additives and Food Products Containing Hemp-derived Cannabidiol Produced and Sold within the State Are Not Adulterated and To Match the State’s Definition of “Hemp” to the Definition in Federal Law. Emergency Enacted; PL 2019, c. 12 (3/27/19)

 

LD 1000: An Act to Make Supplemental Appropriations and Allocations for the Expenditures of State Government and To Change Certain Provisions of Law Necessary to the Proper Operations of State Government for the Fiscal Year Ending June 30, 2019. Emergency Enacted; PL 2019, c. 4 (3/14/19)

 

LD 1001: An Act Making Unified Appropriations and Allocations for the Expenditures of State Government, General Fund and Other Funds, and Changing Certain Provisions of the Law Necessary to the Proper Operations of State Government for the Fiscal Years Ending June 30, 2019, June 30, 2020 and June 30, 2021. Emergency Enacted; PL 2019, c. 343 (6/17/19)

 

LD 1002: An Act Making Unified Appropriations and Allocations for the Expenditures of State Government, Highway Fund and Other Funds, and Changing Certain Provisions of the Law Necessary to the Proper Operations of State Government for the Fiscal Years Ending June 30, 2019, June 30, 2020 and June 30, 2021. Emergency Enacted; PL 2019, c. 415 (6/20/19)

 

LD 1619: An Act Regarding Licenses for the Sale of Liquor for On-premises Consumption. Emergency Enacted; PL 2019, c. 167 (5/30/19)

 

LD 1643: An Act To Establish Municipal Cost Components for Unorganized Territory Services To Be Rendered in Fiscal Year 2019-20. Emergency Enacted; PL 2019, c. 212 (6/06/19)

 

LD 1652: An Act To Make Technical Changes to the Taxation of Marijuana. Emergency Enacted; PL 2019, c. 231 (6/07/19)

 

LD 1683: An Act To Clarify the Definition of “Consumer-owned Transmission and Distribution Utility.” Emergency Enacted; PL 2019, c. 311 (6/17/19)

 

LD 1725: An Act To Create a Minimum Age To Hold a Limited-purpose Aquaculture License. Emergency Enacted; PL 2019, c. 232 (6/07/19)

 

LD 1735: An Act To Clarify the Pathway for a Registered Dispensary under the Maine Medical Use of Marijuana Act To Become a For-profit Entity. Emergency Enacted; PL 2019, c. 312 (6/17/19)

 

LD 1738: An Act Regarding Medical Marijuana. Emergency Enacted; PL 2019, c. 354 (6/18/19)