AUGUSTA — The proposed $92.6 million city and school budget would mean a 9.8% tax increase, the fourth straight year property taxes would go up in the capital city.

The proposed property tax increase is driven in part by a $3.7 million, or 23.7%, increase in the school department’s needs from property taxpayers to help close a funding gap left, in part, by a miscalculation by school officials when they drafted their budget.

The proposed city and school budget delivered to city councilors earlier this month by City Manager Jared Mills is $5.8 million, or 6.7%, up from the current year’s $86.8 million budget. As proposed, it would result in the owner of an average home in Augusta, assessed at $136,000, getting a tax bill of $3,648, a $327 increase from the current year.

Mayor Mark O’Brien said city councilors plan to meet Tuesday to wrap up the budget, and the first of two required readings could come Thursday. A final vote on passage of the budget could take place May 1.

And he said cuts to the proposed tax rate are likely before passage.

“In my experience we never end up where we start,” O’Brien said at an April 17 public hearing on the budget. “I can almost guarantee you, that we will not end up with a 9.8% tax increase, and that we will come in with something lower.”

School leaders said they delivered a responsible budget that limits expenses as best they could. To achieve that, they cut 16 staff positions and added four, netting about $1 million in savings. But they acknowledged the budget’s revenue side is problematic.

The shortage of revenue was a surprise, as school officials thought they had about $3.4 million in funds leftover from previous years they could apply to the budget. However, Karla Miller, the since-departed school business manager, had apparently gotten inaccurate information from an auditor. She later realized the school department had only around $450,000 in its fund balance, greatly reducing that as a source of revenue to help pay for spending.

Superintendent Mike Tracy told city councilors early this month he likely would have still proposed the same spending plan without that miscommunication, as what he proposes is what running the schools will cost. But that leaves a budget gap that school officials anticipate city taxpayers will need to close.

“It’s a responsible budget,” said Martha “Muffy” Witham, school board chairwoman, a lifelong Augusta resident who retired after many years as a school administrator in Maine schools. “I’m a taxpayer in this community. I’m on a fixed income in this community, so I understand the impact this budget will have on taxpayers, I truly do.”

When they met to discuss the school budget for more than three hours early this month, some city councilors told school officials they should have gotten the message in a recent previous joint meeting of city and school officials that they needed to cut the school budget because taxpayers can’t take on that much additional burden.

Ward 4 Councilor Eric Lind cited a United Way ALICE report that found 29% of the Kennebec County population can’t make ends meet even though they’re above the poverty line.

ALICE stands for asset-limited, income constrained and employed; it measures and describes the number of households struggling in a given area.

He said in addition, 19.4% of households in Augusta are below the poverty line. He said that means, adding those two figures together, that 48% of local residents can’t make ends meet now, even before another property tax increase.

“I’ve heard ‘responsible budget’ several times tonight. I’ve heard what the citizens can afford tonight,” said Ward 3 Councilor Mike Michaud. “What happens in June (when the school budget goes to voters for approval) when the people that have to fund this don’t think it’s responsible. We’ve seen a 14.1% increase to taxpayers in the last three years.”
Tracy and At-large Councilor Stephanie Sienkiewicz countered that investing in education could allow more Augusta students to succeed and not be in the ALICE category.

“The point you make about ALICE is exactly why I’m advocating for a budget that supports kids to have the learning and education they need to not be in a position like ALICE,” Tracy said.

Witham and Tracy said much of the increase in school spending is due to major increases in special education costs, especially for 21 students who attend special education programs outside of the school department.

Witham said of the 6.5% increase proposed in school spending, 5.8% of that is for increased special education costs.

Tracy said if there were no increased costs for special education, the total school budget would only be up by $283,000, or .7%. He stressed that the school system really has no say in special education costs, as it is required to provide what is in each student’s individual education plan.

With some councilors critical of the increased cost of the school budget to taxpayers, Tracy said if cuts have to be made, they likely won’t be able to be made to special education, as schools are required to provide those services. Instead they’d be made in other areas, including in potentially cutting teachers or after-school programs, potentially including sports.

In Augusta the school board approves the school budget but city councilors approve the total, combined budget and can, and often do, request cuts to the school’s share of the total city and school budget.

At a well-attended public hearing on the budget in mid-April, some residents urged councilors to not make any cuts to school funding while others said the ongoing property tax increases are unsustainable so budget cuts must be made.

“To consider making additional cuts (to school funding) is unacceptable and extremely short-sighted,” resident Gabrielle Berube Pierce said. “It’s imperative we stop balancing budgets on the backs of our kids.”

Resident Peter Pare said he’s concerned the cost to live in Augusta will become unsustainable in a market where homes sell for $300,000 to $500,000, especially for young people buying first homes, who he said are already barely making their mortgage payments even before a nearly 10% tax increase.