AUGUSTA — The $58.1 million budget proposed to city councilors this week by City Manager William Bridgeo would increase property taxes by 4.24 percent.

Bridgeo said one of the primary drivers of the spending increase in the city’s $26.4 million share of the combined city and school budget is about $650,000 in increased wages and benefits for city employees.

Part of that is due to contractual obligations of 2.5 percent wage increases for union employees, as well as salary or step increases for other city employees, and the addition of a new full-time custodian’s position, two new part-time staff positions at Lithgow Library, and a new, part-time code enforcement officer position.

Bridgeo said the additional library positions are needed to staff the expanded library, which will be nearly triple its previous size when an ongoing renovation and expansion project is completed at the library. He said officials anticipated additional positions would be needed for the larger library before funding for its construction was approved by voters in 2014.

Bridgeo said the proposed new part-time code enforcement officer position is needed because the city’s two code officers are already over-extended and a proposal for a new property maintenance ordinance will likely place more demands on them. He said the city had three full-time code officers until cutting back to two in 2008 for budgetary reasons. He also said the city’s aging rental housing requires more staff time to help make sure it is safe and sanitary.

“It’s clear they’re over-extended already. They inspect all new construction throughout the city as well as any code violations,” Bridgeo said of code officers. “With an aging housing stock they have an increasing workload.”

The proposed budget would increase the property tax rate from 19.4 to 20.22 per $1,000 of valuation, a 4.24 percent increase.

If the city’s total assessed property value remained the same as it is this year, the tax rate would increase by just 2.15 percent, not 4.24 percent. However, the city’s total assessed property valuation is projected to drop by some $30 million, the first decrease in assessed valuation Bridgeo said he’s had in his 18 years as manager.

Bridgeo said the decrease in total assessed property value is due primarily to a 50 percent increase in the amount of money the state’s Homestead Exemption program allows homeowners to declare exempt from property taxes from the previous $10,000 to $15,000.

The loss of $5,000 in taxable value from every home that is the owner’s primary residence citywide totals $18.6 million in taxable value, or about $360,000 in property taxes. The state will reimburse the city for half of that lost amount of property taxes.

With that change to the state’s Homestead Exemption program, if the budget is approved as proposed, the owner of an average, $116,000 home in Augusta, if it is that owner’s primary residence, would have a tax bill of $2,042, down from the current year by $13.88.

However, the higher the value of a property, the less percentage impact the Homestead Exemption will have offsetting property taxes, Bridgeo noted.

Someone whose home is valued at $133,000 would see their tax bill remain the same as this year at $2,386.

Someone with a $250,000 home would see their tax bill increase by $96 from $4,656 to $4,752.

All properties not subject to the Homestead Exemption, such as businesses, land or camps, would be subject to the full, 4.24 percent increase in property taxes.

Mayor David Rollins, who, with city councilors, was given the budget by Bridgeo late Thursday night, said he had not yet had time to review it, but speculated city councilors would likely seek to trim it somewhat. Councilors, most years, alter the budget as they review it in a sometimes months-long review process.

“I think what he’s offering is a starting point, and I think we’ve got to work to cut that down from where he’s starting at,” Rollins said of the budget proposed by Bridgeo. “I think some councilors are hoping to get it down under 3 percent. I think that’s a realistic goal.”

The entire proposed budget is online on the city’s website.

Bridgeo said it is a challenge to craft a budget that maintains city services residents value while limiting the property tax burden.

“I think there is a lot of support in the city for maintaining the core services we provide,” Bridgeo said, citing services including police and fire protection, road maintenance, parks and education. “The budget is an attempt to strike a balance.”

The school’s share of the proposed budget is $30.2 million, a $1.8 million, or 6.4 percent increase. School officials propose to use $3.23 million of their $5.5 million fund balance, an account made up of money unspent in previous years, to offset their budget’s impact on taxpayers. The school budget as proposed would require an additional $35,000 from local taxpayers over what they paid for schools last year. School board members approved the school budget March 23.

The city’s share of the proposed budget is $26.4 million, a $1.4 million, or 5.6 percent, increase. It would use $1.2 million from the city’s $5.2 million fund balance. The city budget as proposed would require an additional $622,000 from local taxpayers over what they paid last year.

Spending in the combined city and school budget is up $3.2 million, or 5.9 percent.

However, some of that increased spending will not impact taxes.

An $873,000 increase in debt payments will be covered entirely from Tax Increment Financing, or TIF, proceeds the city expects to take in, and thus has no impact on property taxes. The new debt payments are needed to cover debt borrowed to build a new fire station in north Augusta, a new multipurpose firetruck with a ladder and street and other infrastructure improvements.

The TIF money that will pay off that debt comes from revenue generated by projects including the Marketplace at Augusta, Central Maine Commerce Center, expansions at J.S. McCarthy and NRF Distributors and natural gas infrastructure.

Keith Edwards — 621-5647

[email protected]

Twitter: @kedwardskj


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