GARDINER — City taxes likely won’t go up after an outcry from city councilors and members of the public at the first public hearing on the proposed city budget Wednesday night.

City Manager Scott Morelli said the fact people don’t want to go up “was clear to me, and I don’t think that sentiment will change.”

Instead of raising taxes — Morelli had recommended 50 cent per $1,000 in assessment — the city will look to cut around $177,000 out of its proposed budget, the amount of an unexpected shortfall caused by decreased municipal aid from the state.

Morelli originally proposed an $8,738,596 budget that didn’t call for a tax increase and cut $618,000 from department expenses.

He proposed the budget expecting municipal revenue sharing from the state to be funded at the current level.

But a two-year budget unanimously passed last week by the state’s budget-writing committee proposes cutting municipal revenue sharing by about $75 million, a reduction from the $200 million cut proposed by Gov. Paul LePage in his two year budget.

Morelli had recommended increasing the tax rate by 50 cents per $1,000 of assessed value to cover the gap left by revenue sharing.

That would have meant a tax increase of about $73 for the average household in Gardiner, valued at $146,900.

To avoid a tax hike, city councilors agreed to cut the paving budget in half, by around $90,000, and not fund an additional parks maintenance worker and plow truck driver, a full-time position that would have cost around $40,000, according to Morelli.

The city just started advertising for the open position.

Councilors instructed Morelli and city staff to propose another $40,000 to $50,000 in cuts to present to them at their next meeting in two weeks.

Some councilors also objected to increasing the tax rate in the same year they’re dipping into the reserve fund.

Morelli had proposed taking $175,000 from the city’s fund balance as a firewall to get through next year without a tax hike.

The city could be facing a budget gap of more than $500,000 in fiscal year 2015 if it doesn’t receive additional funding from the state or increase its revenue base.
The majority of residents who spoke at the meeting, which lasted about four hours, urged councilors not to increase the tax rate, but others said they would be willing to pay higher taxes to maintain services.

Opponents of the tax increase argued that many people in Gardiner can’t afford to pay more and that a higher tax rate would continue to stunt population growth for a city that has been losing residents.

Proponents of taking the tax hit said the services and resources in the city are why residents move to, and remain in, Gardiner.

Around 10 residents spoke during the public hearing and five strongly advocated to keep the tax rate flat.

George Trask, a former city councilor, was one of the strong advocates for maintaining the tax rate.

“People can’t afford to do that. You can’t, you can’t, you can’t. Period,” Trask said to the council.

He suggested cutting funding to the Boys & Girls Club and to Johnson Hall Performing Arts Center.

“They don’t need our money. We need our money,” Trask said. “Our taxpayers need our money to get by.”

Some of the interest in avoiding a property tax increase centered on councilors’ apprehension to pass the $20 per $1,000 of assessed value mark.

Gardiner’s tax rate is $19.90 per $1,000 of assessed value.

“The reason why we’ve tried to hold the line on taxes the last few years is we’re worried about people leaving or not coming to the community,” Morelli said.

He said the fiscal year 2013 tax bill for Gardiner residents was on average 33 percent higher than other Kennebec County cities.

Augusta city councilors approved a budget last week that will likely raise the city’s tax rate from $17.55 per $1,000 of valuation to $18.15. Waterville was considering a budget that would raise the tax rate from $25.65 per $1,000 of valuation to $27.95.

Ken Holmes, another former city councilor, said he doesn’t think there is excess  in the budget, but he recommended that councilors don’t increase the tax rate.

He said he would look at the quality of the police, fire and public works departments when moving to a community, but he doesn’t think the majority of people buying a home would do so.

Resident Phyllis Gardiner asked councilors to balance any cuts they make with continuing the services that allow city staff and community volunteers to market the city.

“I think we’re on the cusp of really being able to broaden our tax base,” she said.

Gardiner said she thinks maintaining marketable services is the best long-term strategy for keeping the tax rate down.

The paving budget cut being proposed by council would mean forgoing road paving projected for the next fiscal year.

Councilors said they wanted to avoid cutting the other $90,000, which is being used to pledge for debt service for repaving Highland Avenue.

Not funding the Highland Avenue project would have meant pushing the project back an additional two years, because the Department of Transportation plans projects on a two-year basis, according to Public Works Director Tony LaPlante.

Morelli said construction on Highland Avenue already won’t begin until spring 2015.

Gardiner’s state representative, Gay Grant, spoke to councilors at the start of the public hearing, warning them not to count on a recent proposed amendment to the state budget that would fund revenue sharing at its current level.

Grant, a Democrat, said despite support for the amendment, she thinks it’s more of a symbolic gesture.

The city published two announcements on its website urging residents to contact their local legislators about revenue sharing.

The website displayed an alert on the top of its home page Wednesday titled “Avoid a Property Tax Increase,” with flashing arrows, urging residents to contact their legislators about their support for the amendment.

Grant said she would hesitate to support amending the proposed state budget, because an amendment would likely open the door to other changes.

“If we begin to pick apart this carefully wrought compromise then the whole budget begins to unravel, like a thread pulled out of a cloth,” she said.

Paul Koenig — 621-5663
[email protected]

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