Veazie budget error means residents are paying less in taxes; town must make cuts to compensate

Posted Dec. 20, 2012, at 8:42 p.m.
Last modified Dec. 20, 2012, at 9:31 p.m.

VEAZIE, Maine — The town is looking into cuts and adjustments it can make to compensate for a $150,000 error in this year’s budget.

Town Manager Joseph Hayes, the former Stockton Springs town manager Veazie hired a year ago, said Thursday morning that he planned on meeting with department heads throughout the day to determine what those cuts and reductions might be.

The mistake resulted from confusion between Hayes and tax assessor Ben Birch over how to handle the sewer assessment in the 2012-2013 budget, according to Hayes.

Veazie’s sewer district is a “strange animal” because it has its own assessment, which is rare for a town sewer district, Hayes said. This year’s assessment was $150,000.

“I’ve never seen anything handled this way,” he said.

Hayes said he treated the sewer assessment the same way he handled school and county assessments, believing it should have been factored into the assessor’s tax increment financing calculations and didn’t belong in the municipal budget. Meanwhile, the town manager said, Birch thought Hayes had included numbers in the municipal budget, which is how the assessment was handled under the previous town manager.

Only after recently reviewing each other’s numbers did the two realize the omission, according to Hayes.

Because the assessment didn’t appear in either the municipal budget or the assessor’s calculations, property taxes in Veazie should have been higher this year — about $21.05 per thousand dollars of valuation instead of $20.50 per thousand.

Hayes called the mix-up “embarrassing.”

“I basically dropped the ball,” he said.

After realizing the error, Hayes called town councilors on Dec. 14, explained the situation and asked them to attend an emergency meeting Monday evening.

At the meeting, councilors voted to pull money from the designated working capital fund, which holds about $598,000 — or roughly 10 percent of the town’s budgeted revenue for the year — to make up for the lost tax revenue, as long as the fund is replenished as quickly as possible.

Hayes said the town will refill the account by holding off on a few upgrades, such as new carpets in the town office. The town will also be cutting its phone bill in half and making other small adjustments. Department heads have been asked to offer other cuts.

“The goal here is to not impact the taxpayer,” Hayes said, adding that next year he planned to include the sewer assessment in the next municipal budget to avoid confusion in the future.

Birch was not available for comment Thursday.

CORRECTION:

An earlier version of this article misidentified the date on which the Veazie town manager called councilors to inform them of the budget error. Joseph Hayes called councilors on Friday, Dec. 14, not Monday, Dec. 17.

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