LEWISTON — A proposed tax rate increase might start at 84 cents, but City Administrator Ed Barrett said he’s confident it will go down significantly over the next few weeks.
“I would think that the council will look clearly to get it down below 50 cents,” Barrett said Tuesday.
Barrett presented his draft budget to councilors at a special workshop Monday night. It calls for a $487,000 increase in spending combined with a $692,000 reduction in non-property tax revenues. Combined, the city side of the proposed budget would need an additional $1.2 million from property taxes.
That amounts to an increase of 84 cents per $1,000 of value increase in the property tax rate. That’s an increase of about $122 for a $145,000 home.
Barrett’s proposed tax rate already came down 11 cents before he started talking Monday evening. He had planned to present a 95 cent tax rate increase, 11 cents to cover school district spending and 84 cents to cover increased city costs. But school officials said Monday night they’d work to reduce their 11 cent share.
But Barrett said the remaining 84 cents won’t be as easy to get reduced.
“To get to zero, we would probably be looking at better revenues, eliminating all capital expenditures and look at some personnel reductions in the 40 plus or minus range,” Barrett said.
According to the draft budget, non-property tax revenues are expected to continue to decline, but not as much as they did last year. Barrett’s draft budget calls for $692,000 less non-property tax revenue in 2011-12, a 5 percent decrease. Last year, those revenues declined $2.3 million from the previous fiscal year, a 15 percent decline.
State policy changes in the way sales tax revenues are shared means the city will get $2 million less than they received two years ago.
“The state is actually taking a larger percentage of what has gone into the local government fund and is keeping that,” Barrett said. That money would have reduced the city’s property tax rate by about $1.10.
Barrett’s spending plan calls for an 1.12 percent increase compared to the current fiscal year. Contracts for all six of the city’s labor unions are being negotiated and those costs will come due in the fiscal year 2012 budget.
Barrett’s budget calls for increasing the Public Works street paving budget from $121,000 last summer to $370,000 in the proposed budget. That’s still significantly short of the $1.1 million the department requested.
Barrett said the budget is complicated by an expected $21 million decrease in the city’s overall assessed value. And the city can’t rely on using $700,000 in the fund balances to reduce the tax rate like it did last year. Any money in the fund balances are already spoken for.
“So that’s where we start,” Barrett said. “I don’t expect it’s where we’re going to end up.”
Councilor Renee Bernier said she wouldn’t be happy with a 50-cent rate increase, although Councilor Stephen Morgan said he could accept some increase.
“I’m looking at the whole picture, and people want the services,” Morgan said. “If you get a broken pipe in the middle of the night, at 2 o’clock in the morning on Jan. 13, and somebody calls Public Works and those guys are out there. If you need help, you call the Fire Department, the Police Department. In order to live in a city, the second largest city in the state, sometimes you need to pay for it.”
Staff is scheduled to present the budget to the Finance Committee on April 4. Councilors will begin reviewing department budgets at a special workshop meeting April 7.
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