Committee hears LD 2222 to set municipal cost components for unorganized territories; Washington County manager outlines $640,670 prepayment request

Senator Nicole Graowski opened a public hearing on LD 2222, an act to establish municipal cost components for unorganized territory services for fiscal year 2026–27, and invited Representative Ser to present the bill.

Representative Ser, the bill sponsor, told the committee LD 2222 “establishes municipal cost components for state and county services provided to the unorganized territory that would normally be paid for by a municipality.” He said the bill includes a one-time prepayment for Washington County and that the amounts are based on budgeted FY2026–27 expenditures.

The bill would incorporate state and county costs into the UT property tax assessment, collected to the Unorganized Territory Education and Services (UTES) fund and then transferred as needed to dedicated accounts and the general fund to reimburse state expenditures included in the municipal cost component.

Harold "Chip" Jones, fiscal administrator for the unorganized territories in the Office of the State Auditor, presented the FY27 municipal cost components and drivers. He said the request summarizes costs from six state agencies and 10 counties and highlighted major increases in education (driven by enrollment changes and special education), a LUPC (Land Use Planning Commission) formula change, and county service categories such as roads and bridges, snow removal, solid waste and an 18% increase in fire protection/public safety. Jones described TIFF payments and county capital reserve increases as notable contributors to overall cost growth and cited a total legislative funding request number in his presentation (transcript: “38,39,124”).

Committee members pressed Mr. Jones on specific drivers. Representative Gregory Swallow asked why Arustic County’s capital reserve rose significantly; Jones said large bridge and capital projects and reduced use of fund balance in some counties are part of the explanation. On education, members asked whether special-education shares or per‑pupil costs are higher in the UT; Jones said he would obtain more precise percentages for members.

Renee Gray, Washington County Manager, testified in support and described an urgent local finance problem. Gray said the county discovered carryover accounting practices and that ARPA funds had masked structural shortfalls, leaving Washington County with an anticipated $2.6 million deficit spanning 2021–2024 and exhausted tax anticipation note (TAN) borrowing. She said municipal prepayments from most Washington County municipalities and a separate TAN renewal allowed the county to avoid default, but the county now seeks authorization to collect a $640,670 prepayment from the UT portion so that amounts already spent for county services will be recovered via the FY27 UT mill rate.

"The only option left was to seek voter approval on the 2025 November ballot," Gray said, describing an unsuccessful ballot request and the subsequent municipal prepayment campaign. She added that the county’s approach involved collaboration between county leaders, municipal officials and state offices and that the requested prepayment “represents county services that have already been rendered.” Committee members confirmed that the prepayment is applied against future year taxes (not a new recurring appropriation).

Several stakeholders raised transparency and taxpayer-impact concerns. Ellen Parent, deputy director of the Maine Forest Products Council, testified neither for nor against the bill, urging the committee to make the detailed UT municipal cost breakdown available earlier in the process. "Without a clear breakdown of the municipal cost components for the service rendered in the UT, we cannot take a stance on this bill," she said, noting that a complete analysis booklet traditionally produced by the auditor was not available for public review before the hearing. Representative Elizabeth Caruso read testimony from Somerset County Administrator Tim Curtis supporting the bill for continuity of services but warned that reductions in the use of unassigned fund balances since last year will raise UT property taxes; she said Somerset estimates LD 2222 could increase UT taxes about 12% in her district after recent revaluation effects on waterfront properties.

What happens next: the public hearing was closed and the committee moved into a scheduled work session to complete a supplemental budget report-back. Committee members requested additional data—comparisons by year, scalar breakdowns of state and county components, and special‑education percentages for UT schools—before final report-back and any formal endorsement. The committee recorded those information requests for follow-up at the work session and in staff materials.