GARDINER — City officials are expected to consider their options after a last-minute state budget deal that cut the reimbursement rate to all cities and towns for an expanded statewide homestead property tax exemption.

The homestead exemption is designed to provide property tax relief to homeowners by reducing the value of a home by a certain amount for property tax purposes. Before 2016, anyone who owned a home in Maine that was considered a permanent residence and had lived there for at least 12 months could apply to their city or town for a homestead exemption that would shelter $10,000 of the value of the home from property taxes. In 2016, the exemption amount was raised to $15,000, and this year it was raised to $20,000. Along with the exemption increase, state officials committed themselves to reimburse an increased portion of the property tax revenue the municipalities would give up. Originally, that amount was 50 percent, and it was expected to increase to 62.5 percent this year.

But a partial state government shutdown earlier this month over a failure in the Legislature to reach a budget compromise by the June 30 end of the state’s fiscal year, forced additional negotiations, and the increased reimbursement rate was cut.

The change means that Gardiner will receive $60,000 less than expected as revenue from the state to cover the city’s loss of property tax revenue because of the exemption.

Gardiner elected officials approved the city’s budget that went into effect on July 1 with the full 62.5 percent reimbursement.

Gardiner Finance Director Denise Brown said the City Council has four options. It could add 15 cents to the tax rate, increase the use of the city’s fund balance to make up for the loss, cut expenses to match the decreased revenue to the city, or increase projected revenue by tapping another source.

Brown said she’s recommending using additional excise tax to make up the difference.

Excise tax collections in the city increased in the last several years because of Pine State Trading Co. moving its vehicle fleet to its Gardiner facility, and those vehicles now are registered in Gardiner. In addition, when Pine State sold a portion of its business to Core-Mark Holdings Co., Inc. in a deal announced in April 2016, the transaction included vehicles that were registered again by their new owner.

Elected city officials also might choose someone to fill the vacancy on the Gardiner-area school board. Curtis Ayotte and Anthony Veit are asking to be considered to fill the vacancy created when Kathy Chadwick stepped down from the board. By law, the Gardiner City Council chooses the person who will fill the seat that represents Gardiner for the balance of this year. Voters will be asked to choose who will fill the seat for the balance of the term in November’s election.

Elected officials also are expected to consider:

• Giving the name Mill Pond Street to the road behind Tiger Town that runs along the Cobbosseecontee Stream and now commonly is referred to as the Arcade.

• Removing the stop sign at Harrison Avenue and Winter Street, on the recommendation of police Chief James Toman and Public Works Director Tony LaPlante.

• Appointing Jean Claveau to the Economic Development Committee.

Two executive sessions are scheduled. The first, at the start of the meeting, is for a foreclosure buyback discussion. The second, at the end of the meeting, is to discuss compensation for certain employees.

The Gardiner City Council meets at 6 p.m. Wednesday at Gardiner City Hall.

Jessica Lowell — 621-5632

jlowell@centralmaine.com

Twitter: @JLowellKJ

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