GARDINER — After brief debate Wednesday, the Gardiner City Council voted to use additional revenue sharing to bring down the property tax rate in the current budget year.

Although the calculations are incomplete, the city’s property tax rate had been expected to be $22.20 per $1,000 of assessed valuation. Applying the additional state money is expected to decrease that by about 33 cents.

City Manager Christine Landes outlined four possible options for using the funds. Councilors could create a special account so that the additional revenue sharing could be used for the budget for the fiscal year that starts July 1, 2020; allow the additional amount to lapse into fund balance; use it to lessen the amount of fund balance that’s anticipated to be used in the current budget; or use the amount of fund balance city officials approved in the budget and apply the additional revenue sharing to this year’s property tax calculations.

“There may also be a little bit of increased value in our assessment than what we had originally calculated in looking the mil rate, because I know that’s what everybody looks at,” Landes said.

Applying the extra $118,566, in addition to the $225,000 from the city’s fund balance, could lower the tax rate even more, Landes said.

Rep. Thom Harnett, D-Gardiner, said he ran for office on the promise that he would work to restore state revenue sharing to its statutory 5% level.

By law, 5% of the receipts from sales tax and service provider, personal and corporate income tax collected by Maine state government is set aside to be shared with municipalities as revenue based on their state valuation, tax assessment and population.

Before being elected to the state House of Representatives, Harnett served on the Gardiner City Council for a year and as mayor for six years. During his tenure in Gardiner, he talked about the cuts to revenue sharing and how that affected the city’s budget.

In looking at the city’s annual report, he said, he was struck by a letter from Gov. Paul LePage, the state’s former Republican governor, admonishing municipalities by saying the lack of revenue was not the problem; rather, municipalities were not being fiscally responsible in terms of taxes and the services they offer.

“I could not disagree with that letter more,” he said. “We have all seen the numbers of how much municipalities like Gardiner lost over the years when revenue sharing was 2%, a 60% reduction of what it should have been.

“It’s a lack of understanding and it’s curious,” Harnett added, “because when the prior chief executive was the mayor of Waterville, he thought revenue sharing was the most important function that the state provided.”

This year, he said, he was disappointed to see that the two-year budget proposal of Democratic Gov. Janet Mills set revenue sharing at 2.5% for this budget year and at 3% for the next budget year. He built a coalition of more than 100 legislators across party lines to move those numbers to 3% this year and 3.75 % next year.

“It’s important to me that you demonstrate that you will use this money to try to relieve the property tax burden,” Harnett said. “You’ve all sat through property tax abatements.

“It’s the hardest thing that I had to do on this council, and while the numbers might not blow you away, it’s a start,” he added. “I think it’s important that Gardiner continue its history of very responsible fiscal management.”

Applying the money to the property tax rate sends a message to taxpayers that their elected officials hear them, Harnett said, and it also sends a message to state lawmakers to show that municipalities are using the funds as they were intended.

In discussing the move, councilors debated whether they prefer to use the money to reduce property tax rates in the current budget or use it in the next one, when officials already are expecting the property tax rate could increase by 70 cents, partly because of negotiated wage increases and delaying equipment purchases to the next fiscal year.

“We might want to do some thinking about next year’s budget,” District 1 Councilor Terry Berry said.

“I am just trying to figure out how much of a benefit this is going to make, or if we keep it to the next budget round to offset the next increase,” At-large Councilor Tim Cusick said.

Early calculations by city officials estimated that Gardiner would receive an additional $106,404 when the revenue sharing was increased from 2.5% to 3%. But the final number, calculated by the state, was actually higher, at $118,566. During the discussion, it appeared that elected officials were discussing only the $12,000 difference between the initial estimate and the state’s final number, which would represent only about 3 cents of the mil rate.

District 2 Councilor Amy Rees said next year, revenue sharing is expected to be at 3.75%, and that will make a difference.

“It’s the principle,” she said. “We have been asking for revenue sharing in order to relieve property tax burdens, and I think now that more of it is coming back, it’s our obligation to follow through on that.”

Mayor Pat Hart said she understands the need to be good stewards of the future as well as the present, and she’s confident the revenue sharing will be paid out next year at 3.75%.

Before the council’s unanimous vote, Hart said she favored applying the money to this year’s budget because it honors the work the Legislature had done as well as the work that city officials have done to keep costs low.

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