HALLOWELL — City officials finalized a $6.2 million expenditure budget and a $938,755 revenue budget Monday, which could mean a $290 increase in annual taxes for the average city taxpayer.

City councilors also passed a revenue budget, which was lightly reduced from a draft $938,755 by late changes, by a 6-1 vote. Final copies of both expenditure and revenue budgets were not available Monday night.

The vote followed a tense discussion between councilors about how the city’s tax increment financing offsets were accounted for in the budget and terse testimony from voters rebuking an increase in property tax rate. Councilors made about $128,000 in last-minute cuts, prorating costs for an assistant clerk with TIF funds and striking $108,000 in funding for a culvert project.

The draft expenditure budget available ahead of the meeting represented a 10.6% increase over last year’s $5,773,289, and the revenue budget represents a 2.9% decrease over last year’s $1,013,895. City officials said the increase in spending is addressing a backlog of deferred capital expenditures.

Despite a big increase over last year’s budget, the expenditure budget came in about $200,000 lower than the budget passed during the second reading. About $69,000 of the reduction comes under capital improvements, which have been increased from $22,868 to $136,000. Other reductions include $48,000 for the first year of a lease for a new fire vehicle and $19,000 for protection of the city’s salt supply.

Hallowell Fire Chief Jim Owens said the new truck would have replaced a 32-year-old vehicle that “does not meet current safety standards.” He said it was “one of the oldest trucks still in service” in the greater Augusta region, and it’s becoming difficult to find parts for the aging vehicle.

“My responsibility is to recommend an option to them and I’ve done that,” he said. “If the city can’t afford it, that’s their decision, not mine.”

Other reductions include smaller cuts of $2,500 for forestry, $1,000 for professional assessments, $6,500 for tax increment financing agreements and $3,100 for a summer intern.

The city’s municipal revenue also took a hit, dropping from $1,070,046 in the second reading to $983,755 in the final. Councilor George Lapointe said the reduction is because “personal property revenue came in below estimates, in large part because of depreciation.”

Councilors and Finance Committee members Kate Dufour and Maureen Aucoin, with minor interjections from City Manager Nate Rudy, quibbled back and forth about how numbers used in the budget were reflected in the tax rate commitment sheet, a form used to calculate the city’s property tax rate. Aucoin has disagreed with city staff through the budget process about how numbers were calculated and used in the budget. Aucoin cast the only dissenting vote.

Last month, the Kennebec Journal reported that an average Hallowell taxpayer could expect a $300 increase to their annual tax bill. Aucoin referenced a property tax rate of $21.80 per $1,000 during the discussion about the budget. After the changes, it would be around $21.30 or $21.40, according to Mayor Mark Walker.

The average taxpayer, with a property valued $182,000, can expect an increase of more than $290, from $3585.40 to at least $3876.60.

Before the changes, two residents, Larry Davis and Lisa Harvey-McPherson, spoke about the increase in the property tax rate, despite there not being a scheduled public hearing Monday. Harvey-McPherson, a former City Councilor, said the increase was “astounding.” She added that she was worried about multi-generational families not being able to pass properties down because taxes were too high. She said one-third of homes for sale in Hallowell have been on the market for 200 days, an indication, she said, that taxes are too high.

“I worry we’ve created a transient population that loves our city and can’t afford to live here,” she said. “You’ve made our economic challenge more significant.”

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