AUBURN — It might be time to change a city rule designed to keep budget increases in check, according to City Manager Clinton Deschene.
Deschene said the city’s rule that requires a special override vote by councilors to approve a city spending increase that is higher than the cost of living should really focus on property taxes.
“We are in a situation now where our spending has increased, but so has our revenue,” Deschene said. “That new revenue is part of the way we are keeping our taxes down.”
Councilors are reviewing a proposed budget that increases Auburn’s property tax rate for municipal and school services by about 1.55 percent — about $48 on an Auburn home valued at $150,000.
To get there, Deschene and City Councilors had to cut some spending and find new revenues — including creating a new city ambulance service. That increases city costs by $635,468 but should give the city $987,000 in new revenue.
Thanks largely to the ambulance service costs, Auburn’s expenses for the coming 2014-15 fiscal year will increase by about 4.74 percent. That’s well above the 2013’s 1.6 percent inflation rate and will need a supermajority vote by councilors to win approval.
“But the property tax increase, for both city and schools, is within that 1.6 percent range,” Deschene said. “We’ll still need an override to get the budget approved. But I think the ordinance is regressive and does not look at the whole picture.”
Councilors are scheduled to review their proposed budget again at their June 2 meeting, but Deschene said he expects councilors will delay a vote on the budget until after a June 10 ballot on the school budget.
Voters are being asked to approve a school budget that increases the property tax rate by 39 cents per $1,000 of property value for education.
County taxes are also increasing Auburn’ tax rate by about 1 cent. Property taxes for city services, like police, fire and public works, would actually decrease by about 8 cents per $1,000 of property value.
All together, the proposed budget calls for collecting about $41.6 million in fiscal year 2014-15.
Deschene said the city’s budget limiting rule can actually push the property tax rate up.
“It can be very bad for a city if revenues are going up or they are going down but you’re just focused on expenses,” Deschene said. “For example, if somehow the city loses $10 million in revenue but expenses stay the same it doesn’t matter. We could have a huge tax increase but nothing is being added to taxpayer services.”
Deschene said he wants to preserve the override, but change its focus.
“I think it’s smart, but it should link to the property tax commitment,” he said.
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