HALLOWELL — The Hallowell City Council moved forward with a first reading of a proposed $6.4 million expenditure budget Monday night.

The expenditure budget and revenue budget presented Monday were passed unanimously with very little discussion. Both could have major changes by the time they are made official after a third reading, which could come after the fiscal year begins in July.

Councilor George Lapointe said the third reading will be “some time in the future.” He advised his fellow councilors to go through the budget line-by-line and send any comments to the Finance Committee for review at their June 17 meeting.

“It is a tough budget and nobody will like it because it’s so tough,” he said.

Earlier this month, the Kennebec Journal reported that Hallowell’s budget, which was tentatively set to be completed in mid-July, may not be completed until later. During a meeting of the city’s finance committee, city officials came to the consensus that it would be difficult to finalize a budget because there is no concrete data about state-funded revenues.

A draft expenditure budget showed $6,483,027 in expenditures, a $196,988 —  a 3.18% — increase to the current fiscal year’s expenditure budget of $6,286,038.

The city’s payment to Regional School Unit 2 is increasing by $149,312 — or 4.88% — from $3,062,505 to $3,211,817, according to the draft.

Finance Committee Chairperson and Councilor-at-Large George Lapointe said last week the school’s share had been trimmed from a $222,000 increase, but the $149,312 still represents an additional 66 cents to the city’s property tax rate.

RSU 2 Superintendent Mary Paine was scheduled to appear at Monday’s meeting, according to the agenda, but she was not listed as attending the Zoom meeting.

Hallowell’s share of county taxes are on the rise in the draft budget, from $266,560 this fiscal year to $277,099, up 3.95%.

A number of Kennebec County officials attended Monday’s meeting to discuss the increase, including, County Administrator Bob Devlin, who said the county is seeing the biggest increase in its budget in “over a decade.”

Devlin said there is need for more deputies at the Kennebec County Sheriff’s Office, which Sheriff Ken Mason later said would cost about $120,000 for salaries, benefits and equipment. Mason said the Maine State Police are reducing their portion of call sharing, which increases the need for deputies.

“They’re not going away, but I have to protect those citizens of our county,” Mason said. “I can do nothing and hope everything works out, but that’s not a plan at all.”

Devlin said four deputies may be needed, but the county government has incorporated three — one coming on the force in July and two others in January — in its budget for the next fiscal year. Devlin also said the Kennebec County jail ran a deficit for the first time last fiscal year because the state did not fund it adequately.

Councilor George Lapointe asked county officials if there would be cascading effects of deferred expenditures in the next fiscal year’s budget in the following fiscal year’s budget. Mason said some of the resources funded in the next year’s budget would not be needed in the following year’s budget, meaning there could be a decrease.

A number of lines in Hallowell’s expenditure budget have decreased, like the community services budget, which has been cut to $26,533 — or 63% — from $72,087 in the current fiscal year.

Councilor Kate Dufour sounded off on an increase to the county’s budget, saying reliance on state funding at the county level cannot be the norm because the burden falls onto taxpayers if the state does not provide adequate funding.

“It’s just incredibly frustrating,” Dufour said, “and we need to figure out how we stop pushing all this burden on the property tax payers. I can’t think of a worse time for this increase to come.”

The city is anticipating $919,907 in municipal revenue, an $86,408 — or 8.59% — decrease from the current fiscal year’s municipal revenue of $1,006,315.

The decrease in revenue in next fiscal year’s draft budget shows a few high-profile anticipated decreases, including $85,000 less in excise tax payments, from $425,000 to $340,000; a $44,000 decrease in state revenue sharing, from $219,996 to $175,996; and a $23,377 decrease in homestead exemption, from $116,883 to $93,506.

A large increase in the revenue budget is due to a new TIF revenues line, which injects $100,000 from the city’s TIF district into the budget. That funding can only be used on certain projects, some of which include cleaning City Hall, legal services, a flood gauge and funds for outside organizations such as the Kennebec Valley Council of Governments and the Kennebec River Rail Trail.

Most Maine municipalities are bracing for a reduction in revenues related to the coronavirus pandemic. In March, State Treasurer Henry Beck wrote in an op-ed that “municipalities should begin planning for a decrease in revenue sharing receipts immediately.”

“State government should expect a decline in general fund tax receipts, which will result in a decrease in monthly revenue sharing with Maine’s towns and cities,” Beck wrote.

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