Got crumbling roads that need paving? Think another firefighter would reduce overtime costs? School enrollments dropping?

It’s local budget season in Maine, which means town and school administrators are crunching numbers and shuffling priorities, always with one eye on the bottom line and one on the state Legislature.

It also means tax rates are about to go up, once again.

With a few exceptions – such as Portland’s loss of millions in state funding for public assistance – municipal and school budgets in the Greater Portland region have generated little drama this year. Town managers and school superintendents have mostly presented status quo budget proposals that would increase spending by 2 percent to 4 percent to cover existing operations and rising costs. With declining non-tax revenues for many towns, those proposals would translate into tax rate increases in the 3 percent to 6 percent range, or more than $100 a year added to the tax bill for a home valued at $200,000.

EXTRA NEEDS, BIGGER TAX IMPACT

Some municipalities are asking for bigger increases to deal with special circumstances.

Scarborough’s proposed 8 percent tax rate increase – the equivalent of $256 a year on a home valued at $200,000 – would help cover a drop in state education aid and the purchase of computer tablets, for example.

Scarborough Town Manager Tom Hall said the budget “focuses on maintaining what we have,” but that the town anticipates getting $3.7 million in state education aid in fiscal 2016, which is less than last year and down from about $7 million in fiscal 2009. “That’s made up in property taxes, and it amounts to a tax shift over time,” Hall said.

Biddeford’s proposed 17.6 percent increase in the municipal budget – the largest increase among local communities analyzed by the Portland Press Herald – includes increased spending on road pavement projects after voters rejected a ballot proposal to borrow $12.25 million to fix potholes and crumbling roads. The tax rate impact is unclear because of Biddeford’s ongoing property revaluation.

Mayor Alan Casavant said city officials know there are people on fixed incomes who can’t afford a tax increase. “We have to be sensitive to that, but there’s this overwhelming reality that we need to address our roads,” he said.

Biddeford’s education budget, on the other hand, is up only 0.28 percent, or $95,000, despite losing $331,000 in state subsidy, said Superintendent Jeremy Ray. The budget proposes to eliminate four teaching positions at the high school and middle school, although it’s not yet clear if actual teachers will have to be laid off.

Portland, meanwhile, is facing some of the most difficult budget decisions of any Maine community.

The expected loss of about $5 million in state funding for Portland’s General Assistance program is largely driving a municipal budget proposal that would eliminate 24 jobs, including 15 that are occupied. Even with the cuts, the combined municipal and school proposals would boost the tax rate by 2.9 percent, or $236 a year for a home valued at $200,000.

Changes in General Assistance funding are not having the same effect on surrounding communities because they don’t see the same level of demand for public assistance programs.

The fiscal year 2016 budgets now under review will take effect July 1 and show up in property tax bills in the fall. Many towns will be holding public hearings and school budget referendum votes in May and June.

ANTICIPATING STATE BUDGET CHANGES

One of the biggest challenges for communities across the board this year, as it has been for several years, is planning and preparing for changes in the state budget that could force towns to raise additional money in property taxes or further trim spending.

State funding for education is the biggest short-term question mark for communities preparing 2016 budgets, said Geoff Herman, the Maine Municipal Association’s lobbyist at the State House.

The LePage administration’s budget proposal would effectively keep the overall amount of education aid at about the same level as this year. However, the distribution is shifting so that some districts will see an increase and others will see a decrease.

The Legislature, meanwhile, is pushing to increase the overall aid amount before the budget takes effect, which could mean bigger increases or smaller decreases in local budgets.

Longer-term changes also are coming into play. Many local officials are preparing for future cuts in another key source of state funding – revenue sharing. Under that program, the state effectively sends a portion of sales and income taxes back to local communities where they are generated.

Maine cities and towns are counting on receiving a total of $60 million in revenue sharing for fiscal year 2016. But the LePage administration has proposed eliminating revenue sharing in fiscal year 2017, and local administrators are already trying to limit or reduce spending to prepare.

“We need to be as fiscally sound as we can be this year so we don’t have holes to fill next year,” said Cape Elizabeth Town Manager Michael McGovern.

McGovern is planning to get $430,000 in revenue sharing from the state in fiscal 2016, but he’s anticipating that funding may evaporate in fiscal 2017. “You take a $400,000 revenue stream away from a city or town and it means they either have to cut spending or increase property taxes. It’s huge,” he said.

Falmouth Town Manager Nathan Poore said he based his budget proposal on a best estimate of what revenues will be in fiscal 2016, rather than try to forecast the impact of tax-reform and revenue-sharing proposals currently at play in Augusta.

“We don’t know what the state’s going to do,” he said, “so we’re developing a responsible budget that will have the least impact on the mil rate.”

Staff writers Kelley Bouchard, Gillian Graham, Leslie Bridgers, Matt Byrne and Randy Billings contributed to this report.


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