GARDINER — After two years of keeping taxes flat, City Manager Scott Morelli is recommending an 8 percent tax increase to close a nearly $600,000 shortfall in next year’s budget.
Morelli presented his recommendation to City Council near the end of its four-hour meeting Wednesday night.
Councilors plan to provide Morelli and the city staff feedback on the recommended cuts and expenditures at their next meeting, on April 30, and formal public hearings on the budget probably will be held in early June.
Morelli said the budget was developed with three objectives in mind: maintaining existing services, limiting the need for a property tax increase and incorporating the council’s goals, which include making the city more attractive and affordable.
He stressed that the city has avoided a tax increase as a result of the municipal budget in three of the last four years, but he said it won’t be possible to maintain the current services without raising taxes next year.
The proposed increase, which includes expected budgets for the school and county, would raise the current $19.90 per $1,000 of assessed value tax rate to $21.50. That represents a $234.76 increase for the median home’s tax bill in Gardiner. The median home value is $147,000.
There aren’t any significant changes in the proposed $9,291,963 budget, up 5.9 percent from the current one. Fixed-cost increases from retirement contributions, health insurance and step raises encompass about two-thirds of the overall municipal budget increase. Last year, the city took $175,000 from its reserve fund balance to keep taxes flat.
City officials have tried in recent years to keep the city’s tax rate from cresting beyond $20 per $1,000 of assessed value.
Gardiner’s population decreased significantly between 1990 and 2010 — by 14 percent — while surrounding communities and Kennebec County overall experienced population increases. Some have blamed the city’s high taxes, relative to other communities in the area, as a cause of the population shifts.
West Gardiner, for instance, has a tax rate of $10.90, and its population rose more than 37 percent between 1990 and 2010, according to the U.S. Census.
One resident, Maureen Blanchard, of Dresden Avenue, spoke out against the potential tax increase at the meeting. She said her income, along with that of other senior citizens, is fixed and won’t rise with any tax increase.
“I’m asking you to think about not raising it,” Blanchard told councilors. “I’m getting fewer services, and I’m paying more.”
However, Mayor Thomas Harnett said recent cuts to state aid to municipalities have forced the city into this position. Raising taxes is not something councilors will consider lightly, he said.
Morelli also focused criticism on the state, saying it is responsible for the city’s predicament.
Last year, Gov. Paul LePage proposed eliminating all revenue sharing, but the Legislature later restored two-thirds of the proposed cuts. Still, the city of Gardiner receives $530,644 less than what state law mandates for a level of revenue sharing, Morelli said.
He said the city would be asking for only a one-half percent tax increase if it had those additional funds.
“The state simply has failed in its responsibility and shifted the responsibility on (towns and cities) so they can avoid making the tough choices,” Morelli said.
The one major departmental change Morelli proposes is increasing the city’s share of its fire and ambulance budget. The city now funds 20 percent of it, while revenue from its ambulance service funds the rest. Morelli is proposing to increase the city’s burden to 35 percent as a result of revenue shortages in the ambulance service and increased costs.
The city provides emergency medical service to seven communities, including Gardiner. Concern about unpaid bills from individuals who have received service has led some of the towns to consider leaving for private ambulance firms.
As a result, the city is proposing to write off a third of the current unpaid bills to ensure the viability of the service.
The net effect of the changes on Gardiner would result in a $34,558 budget increase, which comes out to a $15.43 tax hike for a median-value home.
The city plans to make offers to the towns of Dresden and Richmond to increase revenue for the fund.
The city also was scheduled to host a meeting of area communities Thursday at the Pittston Town Office to pursue regionalization options for fire departments.