Howland considering large tax increase

By Nick Sambides Jr., BDN Staff
Posted May 07, 2012, at 5:20 p.m.

HOWLAND, Maine — An anticipated funding shortfall of close to $150,000 might force town leaders to increase property taxes by $300 on properties worth $100,000 come July 1, Town Manager Jane Jones said Monday.

The Board of Selectmen is considering a proposal that would increase the municipal budget from the $537,000 allocated for the 2011-12 fiscal year to about $550,000 for the 2012-13 fiscal year, which begins July 1, just to meet expenses, Jones said.

That increase, plus expected decreases in property taxes on the Penobscot River dam owned by Bangor Pacific Hydro and in state revenue sharing, has the Board of Selectmen considering several options, Jones said.

“It is really a challenge. Everything has been put on the table,” Jones said Monday.

Selectmen will meet at 6 p.m. Monday, May 14, to discuss the new budget.

Two key elements are missing from the deliberations, Jones said. SAU 31’s board of directors is still assembling a school budget and Penobscot County officials have yet to specify how much of a county assessment they will seek from Howland.

“If you look at it from where it is now, if it just stands where it is, we are looking at a 3 mill increase without knowing what the schools may or may not need,” said Jones, who also serves as the town’s tax collector and treasurer.

Under the town’s current 16.4 mill rate, a property worth $100,000 is taxed $1,640 annually. Under a 19.4 mill rate, that property would be taxed $1,940.

The board has not considered layoffs of any town workers yet, Jones said.

Board members are looking at using some or all of a one-time $127,000 payment the town received from the Maine State Retirement Fund to offset the funding decreases, Jones said. The retirement funds date to Howland’s payments into the system in the 1980s. The money is the town’s portion of unclaimed funds, Jones said.

“That money couldn’t have come at a better time,” Jones said.

Selectmen also could use some of the town’s $310,000 undesignated revenues fund to make up for shortfalls, Jones said. However, most financial advisers recommend keeping 10 to 15 percent of the town’s total government budget in that reserve fund, she said.

Howland homeowners still are adjusting to the completion last year of a two-year revaluation that increased the taxable value of most homes. That, and the town’s increasing number of elderly residents who are on fixed incomes, makes sudden increases in the town’s budget especially hard to manage, Jones said.

Howland has endured a 16.5 percent drop in its overall population over the last 10 years, with the 25-to-45 age group declining markedly, Jones said. The number of fixed-income Howland residents was not available on Monday.

“The Board [of Selectmen] is very sensitive to the needs of those who are seniors who are on fixed incomes,” Jones said.

Follow BDN writer Nick Sambides Jr. on Twitter at @NickSam2BDN.

http://bangordailynews.com/2012/05/07/news/penobscot/howland-considering-large-tax-increase/ printed on August 20, 2014