Old Town tax rate to increase by more than 10 percent

Posted May 11, 2011, at 9:40 p.m.

OLD TOWN, Maine — How much residents will pay for the 2011-12 city budget come tax time will depend on whether the City Council wants to eliminate three jobs — one police officer, one firefighter and one in public works — or raise the tax rate even higher.

Either way, the city’s $17.80 property tax rate is going to increase by more than 10 percent, City Manager Peggy Daigle said Wednesday.

“I’ve got it down to two percentages,” she said. The city councilors “have got to decide.”

The proposed $8,568,009 municipal budget for 2010-2011 is $165,637, or 1.97 percent, more than this year’s, the city manager said.

“It’s not all that bad,” she said of the increase, but the problem is made worse by a decrease in municipal revenues to the tune of $311,000, which creates a $477,000 budget hole.

To make up for the nearly half-million-dollar shortfall, city councilors will have to decide between a property tax rate increase of 10.9 percent or 13 percent.

“The basic difference is people,” Daigle said. “To get down to the 10.9 percent we’re cutting three positions. The 13 percent doesn’t cut any positions.”

The 10.9 percent increase to the property tax rate would increase the rate to $19.74 per $1,000 of property, and the 13 percent increase would result in a property tax of $19.93.

A special council meeting is scheduled for 6 p.m. Thursday so the budget committee can discuss what direction to take, Daigle said.

“I’m hoping they are going to give us some direction,” she said.

The first reading of the proposed budget is tentatively scheduled for the City Council meeting on June 6, and the second reading is expected to take place on June 16, Daigle said.

The proposed 2011-2012 budget and other documents may be viewed at the city’s website, old-town.org.

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