BUCKSPORT, Maine — Town officials will try to keep the mill rate even as they develop the municipal budget for the 2009-10 fiscal year.
But given the current economic climate, that will not be an easy task, Town Manager Roger Raymond warned councilors last week.
“We all know what the economy is like,” Raymond said. “We have some leeway. But revenues are going down.”
Revenues from excise taxes have decreased significantly, and revenue sharing is expected to be down significantly. Raymond told councilors that the town has been conservative in budgeting in the past and should be able to counteract those revenue decreases.
The biggest problem will be dealing with the loss of income from municipal investments, he said. Interest earnings average around $400,000 each year, and last year they amounted to $435,000, Raymond said. Based on performance so far, he estimated that this year the total earnings would be $300,000. It will be difficult to budget around that large a loss, he said.
“We’re going to have to make up that difference somewhere else,” he said. “It’s going to be tough. There’s a likelihood there’s going to be cuts. That’s something we haven’t seen since I’ve been here. I’m concerned that it could result in position cuts.”
The town has existing contracts that it will have to honor, and councilors were well aware of the implications. Contracts for municipal employees call for a 3 percent increase in wages in the coming year.
“If we honor those contracts, then the money will have to come from somewhere else,” Councilor Joel Wardwell said.
Some factors will ease that obligation. Two longtime employees are retiring at the end of this year. Two town committees are currently reviewing ways to deal with those retirements — in the police department and the dispatching department — that could result in a decrease in costs.
A tax assessment appeal from Bangor Gas could be a factor in the budget process. The company has appealed its current tax assessment on the 9.2 miles of high-pressure gas transmission lines that run to the gas turbine at the paper mill. The line has an assessed value of $6,457,700, which generates about $82,000 in taxes annu-ally.
The company has calculated two dramatically lower assessments — $58,718 or $1,316 — based on different methods of calculating property values. That would reduce the tax levy to almost nothing. At Thursday’s meeting, the councilors agreed to hire the law firm of Perkins and Thompson to represent the town in the case.
Raymond did not discuss the details of the case but noted that the town used the same method of assessing the Bangor Gas lines as it did for other high-pressure lines that run through the town.
The largest single piece of the budget is the education budget, and school officials already have begun work to prepare that. Things will be a little different this year, based on the vote on school consolidation last Tuesday. Voters agreed to the plan to form a regional school district with Orland and the SAD 18 towns of Prospect and Verona Island.
Superintendent Jim Boothby said the school committees had developed about 80 percent of the budgets for the three school departments but waited until the vote to proceed. Boothby said Thursday that they are now working to combine those budgets into one regional school unit budget. The first draft should be completed shortly, and they will begin the work of aligning it with revenues, which have not yet been calculated.
Boothby also acknowledged the economic pressures this year and said the school department would not allow quality to suffer in the schools. He also said, however, that school officials may have to make some difficult decisions.
“We’ll develop a budget that is effective for the education of our kids and efficient in terms of the tax base,” he said.
Budget meetings will continue throughout the spring. The council will adopt a combined budget before the start of the new fiscal year on July 1.