AUGUSTA — City councilors spent the better part of Saturday taking stock of the city and brainstorming goals to pursue in the new year. While there are concerns about the budget, roads and serving the city’s most vulnerable, the future, like the present, is rife with optimism.
“I think we’re in pretty good shape,” Mayor William Stokes said at the conclusion of the six-hour goal setting session at the Augusta Civic Center. “Commercially were in very good shape. We’ve held our own in a very difficult time.”
The yearly sessions are a chance for councilors and department heads to reflect on the year behind and look ahead at the one ahead. Much of the morning was spent hearing from those department heads who addressed the ongoing efforts in various departments, such as public works, planning and the school district. Police Chief Robert Gregoire’s presentation included the changing face of crime in the city, which includes a marked decrease in the number of pharmacy robberies and a stark increase in heroin use and the presence of gangs to facilitate that trafficking.
Councilors wrapped up the session by creating a master list of short- and long-term goals, which ranged from making pedestrian and bicycle travel safer on Mount Vernon Avenue to funding expansion at Lithgow Public Library. Councilors also are anxious to improve communications between its members and the public and to generate greater interest, particularly among young people, in local government and voting. Stokes said he would like to do more to promote residential development by pointing out amenities and services available in the city.
“You get a lot of house for your money,” Stokes said.
Much of the second half the session, however, was spent discussing the budget and the effect the state will have as the council develops a spending plan.
“We are political subdivisions of the state,” Stokes said. “The state sneezes and we catch a cold.”
In recent years, that disease has come in the form of what Assistant City Manager and Finance Director Ralph St. Pierre called an “assault on revenue sharing.” The state implemented revenue sharing about 50 years ago in exchange for legislation that prevented towns from implementing local-option taxes.
“Now they’ve totally blown that up,” St. Pierre said. State lawmakers, facing a massive budget gap of their own, are threatening to cut revenue sharing by another $40 million. That would create an $800,000 void to fill in Augusta, which, coupled with other revenue losses and expected spending increases — for example, all eight of the city’s union contracts are set to expire in June, and St. Pierre said he will factor in 2 percent raises in the budget proposal — would necessitate about a 5 percent property tax increase. That increase does not include the school budget or county assessment.
City Manager William Bridgeo said he and St. Pierre intend to use money in a reserve account to help offset any increase.
Without the ability to levy local taxes, such as for food and lodging, communities have only two ways to fill the void created by reduced revenue sharing: property taxes and excise taxes. St. Pierre said it is myth that economic development is capable of filling the gap. He said it takes about $30 million in development to offset a 1 percent tax increase. To put that in scale, St. Pierre said Augusta Crossing added about $40 million in development.
“To get 1 percent you need an Augusta Crossing every year,” St. Pierre said. “Is that possible? No.”
To soften the blow, the city could create Tax Increment Financing districts to protect from the state additional money generated by development, such as the gas lines going in throughout the city. The city could use the money for capital improvements, such as building a fire station in North Augusta or road repair; but TIF money cannot be used in the general fund for property tax relief.
The other option is to forgo a TIF for the gas lines and apply the additional revenue to the general fund. Without a TIF, however, the state, which uses valuation when calculating revenue sharing, would withhold more money from Augusta. The result, St. Pierre said, is that the city would keep only about half of the additional money generated by the gas line.
“I didn’t say any of these were great solutions,” St. Pierre said. “They’re not.”
Katz, who attended the meeting with representatives Lori Fowle, D-Vassalboro, Matthew Pouliot, R-Augusta, and Corey Wilson, R-Augusta, offered little hope that the state would offer relief. He said the total state deficit, which includes shortfalls at the Department of Health and Human Services, could total $180 million. He said none of legislators supported cuts in revenue sharing, but it may ultimately wind up on the chopping block. He expects lawmakers to consider tax increases and eliminating business incentives.
“None of these are good alternatives,” Katz said. “There are difficult choices facing us.”
Councilor Dale McCormick suggested the legislators change state law to allow communities to impose local-option taxes. Pouliot said the option was less popular in rural areas, where there are fewer opportunities to generate significant revenue from local taxes.
“The covenant has been broken,” McCormick said. “What are you going to do about it?”
Craig Crosby — email@example.com