Orono residents to see property tax rate rise 58 cents

Posted June 21, 2011, at 5:40 p.m.

ORONO, Maine — Town councilors on Monday unanimously approved a nearly $15 million combined municipal and school budget that increases local property taxes by 58 cents beginning in July.

The projected tax rate for the 2011-12 fiscal year is $21.33 per $1,000 of property valuation, compared to the current rate of $20.75. For a $200,000 home, that equates to an increase of $116.

Town Manager Sophie Wilson said the municipal expenditures of about $9.3 million for 2011-12 actually represent a sharp increase over the current year, but revenues are projected to increase by at least the same amount. She said the unusually high increases in both expenses and revenues have to do with shifting some elements into the budget that had not been there in the past. For instance, she said, for years the town has been saving money to support certain capital improvement and economic development projects that are now included in the next fiscal year’s budget.

Those items — including the redevelopment of the old Webster Mill and plans for a proposed business park off Kelley Road — are now included as new expenses, but the revenue associated with the projects still exists penny for penny.

Despite balancing expenses and revenues on the municipal side, the town could not absorb a big increase in its share of the school budget.

Next year’s budget for RSU 26, which was approved by voters in Orono, Veazie and Glenburn last week, increased by about $1.3 million over the current year. The increase was attributed largely to a renegotiated contract for the district’s teachers. The budget also includes money to launch an alternative education program for at-risk high school students and a pre-kindergarten program.

For Orono, that meant an additional 51 cents on the tax rate. The remaining 7 cents reflects Orono’s share of additional taxes paid to Penobscot County. The county budget that was approved last fall increased as well.

Wilson said the budget process in Orono, which included six workshops, all open to the public, was extremely thorough and transparent.

Town Council Chairman Geoff Gordon agreed.

“Our goal is always to have a flat tax rate or to cut,” he said. “We’re always looking for ways to save money but still provide services to residents.”

From 2008-09 to 2009-10, Orono’s tax rate jumped from $19.70 to $20.80 per $1,000 of property valuation. Last year, the tax rate dropped to $20.75.

Councilors last year transferred some funds from the town’s undesignated fund balance to hold the tax rate down. They had that option again this year but chose not to raid the town’s savings account.

Gordon said he hopes residents understand why taxes are going up, but he suspects they do given the results of last week’s school budget referendum.

“Orono has been a longtime supporter of education,” he said.

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