Increasing expenses, decreasing state revenue causes tax hike in Belfast

Posted June 17, 2014, at 3:04 p.m.

BELFAST, Maine — City officials can’t hold the line any longer when it comes to increasing the municipal budget.

The proposed 2014-15 city budget contains an 8 percent jump in the municipal budget to $8.66 million. Because of that increase and the anticipated increase in the school budget, Belfast property taxpayers can expect the city’s mill rate to rise to 21.91 from 20.8 last year. The increase will mean an additional $111 in property taxes per $100,000 of valuation.

That means a homeowner with a property valued at $200,000 will pay a total of $4,382 in property taxes — an increase of $222.

“I do know that the taxpayer’s only got so much money,” city manager Joe Slocum said Monday. “None of us are happy with this. I do expect some pushback.”

Last year the city budget was flat, following an 11 percent increase in the 2012-13 fiscal year. That jump happened after several years of municipal budget decreases, which were accomplished by using some of the city’s surplus funds to subsidize the budget. Slocum explained that after the surplus dropped to $2.2 million, city officials stopped the subsidy and shifted to the property tax.

Slocum was quick to point out that the net property tax change over the last 7 years is 10.25 percent — or an average of 1.46 percent increase each year. Meanwhile, state government has cut Belfast’s portion of revenue sharing from $749,000 in 2009 to $334,643 last year.

“The state said, ‘Oh, we’ll cut taxes,’” the city manager said. “No, they haven’t. They shifted taxes. There’s not one municipality in the state that’s happy. Not one. The state’s not cutting back. They wanted to reroute the money for other state expenditures. We’ve all struggled with this.”

Slocum said Belfast and other communities are supposed to receive 5 percent of sales tax and income tax, to offset the financial costs to the property taxpayer of the “10 pages of state mandates that we’re required to do.” Those mandates include having an assessor, plowing roads and more.

Meanwhile, the municipal budget is going up for several reasons. Health insurance costs will increase $174,000 because of rate increases, new employees and a shortfall from last year’s budget. The police department’s budget will increase by nearly $100,000 because of two new positions and overtime costs, the ambulance budget will jump by $32,000, retirement costs will rise by $29,000 and the city’s costs for water will jump by $29,000.

The proposed municipal budget will account for less than 30 percent of each homeowner’s property tax bill. The school’s share equals 61.9 percent and the Waldo County share adds up to 8.7 percent.

“I do not think we can meet the expectations of this community without seeing an increase in spending this year,” Slocum wrote in his April budget message. “Belfast is not retrenching. It is moving forward, and that takes attention and draws activity which generates more need, not less.”

The public hearing on the proposed budget will be held at 7 p.m. Thursday, June 26, at City Hall. The document is available on the city’s website, at: www.cityofbelfast.org/DocumentCenter/View/1079

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