Tough questions must be asked while crafting budgets

Posted May 07, 2010, at 6:39 p.m.

No one likes to pay more taxes, and no one wants to see the services they rely on be eliminated. But when the money gets tight, those crafting annual budgets are faced with difficult decisions.

The budgeting process boils down to revenue and expenses. If expenses exceed revenue, we must either find more revenue or decrease the expenses; both options come with an uncomfortable compromise.

In Bangor, we’re faced with one of the largest revenue gaps in our history. Many residents are worried about cuts in the fire department, snowplowing, the library, public health, and the list goes on and on. Considered individually, each department and program has excellent reasons for not being trimmed, but based on last year’s budget alone — we are nearly $2 million short this year — the majority of the council feels it would be irresponsible to balance the budget by simply raising taxes.

So, what do we do? For starters, we must ask a lot of pertinent questions, challenge everything, and make sure we look at organizational changes in our programs and services. Does this mean that our city staff is doing things wrong or doesn’t care about the taxpayers’ dollars? Absolutely not — actually just the opposite.

City budgets are designed by those who serve the front lines. It is their desire to provide the highest level of service to the residents of our city, and our staff does this as well as anyone else in the state. But our staff’s focus is on their department — it’s a microlevel focus, which is what makes their expertise so effective.

The council’s role is more of a general view, a macrolevel focus. Our main responsibility is to ensure that taxpayer dollars are used in the best interest of all concerned and each councilor takes that responsibility very seriously.

This year, the budget process started months earlier than usual. Why? Because we needed time for workshops and discussions. And, because all of those conversations are public, the transparency often leads to outcry and concern from those with specific interests.

In Bangor, you’ll be hearing a lot about the “mill rate” or the amount of money each taxpayer is charged per $1,000 of assessed real estate value. Bangor’s mill rate is currently at $19.05.

This year, for every $120,000 our budget exceeds revenue, we must add another nickel to the mill rate. If we do nothing this year, the $2 million shortfall would increase the mill rate by approximately 85 cents. Adding 85 cents to the tax rate means that homeowners with a home assessed at $125,000 would see their tax bill increase from $2,381 per year to $2,488, and that’s before factoring in taxes we have no control over, such as the state-imposed reduction in the homestead exemption; a home valued at $225,000 would see a tax increase of from $4,286 to $4,478. This increase does not come with expanded services or more value for your dollar — it is just to maintain the status quo and meet the $951,000 in mandated wage increases to city and school staff.

Raising taxes does not improve efficiency or prepare us for another year of revenue shortfalls. It merely masks the issues at hand and puts a bigger burden on taxpayers who, like the City Council, are looking at their own household budgets to find ways of making ends meet.

We are asking hard questions, and oftentimes the answers are difficult to hear. So we ask the residents of Bangor to please stay engaged and be involved in the conversation, but also keep an open mind to the difficulty of the process and the decisions that must be made. We do not want to make short-term decisions that will harm us in the long run. But if we don’t ask the tough questions and challenge how we deliver services, we’ll be setting ourselves up for a far more painful future.

Richard Stone is chairman of the Bangor City Council.

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