WATERVILLE — Councilors late Monday approved a $37 million municipal and school budget for 2012-13, despite pleas from the council chairman not to increase taxes.

With the new budget and a $1 tax-rate increase, property owners will pay $25.65 per $1,000 worth of valuation instead of the current $24.65.

That means someone with a property worth $100,000 will pay $100 more in taxes in the coming year.

Council Chairman Fred Stubbert, D-Ward 1, was the only councilor who voted against approving the budget, asking instead that the $400,000 the city is expecting to be left over from the current budget be added to the proposed budget and that $250,000 more be taken from surplus to help decrease the budget.

“I think it’s important that we balance the budget this year, when the economy is not healthy,” he said.

Others disagreed. Councilor Erik Thomas, D-Ward 4, said using surplus money would put that account below the 16 percent (of the current budget) needed to keep a healthy fund balance and thus allow the city to have good borrowing power. Bonding companies recommend keeping the surplus, or fund balance, at 16 percent.

Stubbert said, however, that the city has great borrowing power.

“We have the highest bond rating in New England right now,” he said.

The current year’s $36.7 million budget is a little more than a half of 1 percent below the new budget.

The new budget calls for taking $1.5 million from surplus already.

The school’s budget is $17.1 million. Schools are getting $773,000 less in state subsidy in what school officials call one of the worst budget years they have seen.

The school budget calls for cutting 12.5 staff positions.

School Superintendent Eric Haley said the city will have $473,000 in added taxes to support a school budget that is less than the current budget.

Councilor John O’Donnell, D-Ward 5, said the government and the Legislature are giving enormous tax breaks to businesses and forcing local people to raise property taxes.

Councilor Karen Rancourt-Thomas, D-Ward 7, said she did not want taxes to increase and no one on the council does, but it must occur.

“We have to do what we have to do,” she said.

Councilors said if the tax rate does not increase by $1, it will have to be raised $2 more next year.

Resident Amanda Isgro stood to say she thought everyone should challenge themselves to cut back, and not increase taxes.

“If we never do the exercise of cutting back and tightening up, we’re going to be in this position forever,” she said.

Mayor Karen Heck said she empathized and urged residents to contact their state leaders to stop pushing the burden of property taxes on local people.

“Raise the sales tax, which is much fairer, or change the way income tax is created,” Heck said.

Amy Calder — 861-9247

acalder@centralmaine.com

 

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