BANGOR, Maine — City councilors got their first look Monday at the proposed 2011 fiscal year budget, which recommends cuts across numerous departments but also projects large losses in local and state revenue.
The result is a projected property tax increase of about 80 cents per $1,000 of valuation, from $19.05 to $19.85, for the fiscal year that starts July 1, 2010.
Interim City Manager Bob Farrar and Finance Director Debbie Cyr, who presented the proposal to councilors, agreed that a number of unexpected factors conspired to create a budget that reflects both difficult cuts and potential tax hikes. Farrar also stressed that the initial municipal budget of about $45.4 million is a starting point.
“We understand that many things proposed will be distasteful to councilors,” he said.
First, on the revenue side, the city is expecting a loss of more than $2 million from the previous year, or 4.6 percent of total revenues.
Most of the loss represents a reduction in municipal revenue sharing from the state, but Bangor also projects less money in automobile excise tax and interest income. Additionally, the city is expected to lose roughly $14 million in assessed property value, which will decrease the amount of tax revenue.
Areas slated for change include:
• Eliminating the equivalent of 7½ staff positions, which are all vacant.
• Decreasing overtime budgets for the police, fire and public works department by more than $100,000.
• Eliminating the appropriation of $100,000 to the Commission on Cultural Development.
• Reducing the contribution to the Bangor Public Library by $32,900.
• Increasing BAT bus fares; eliminating the Saturday service of the BAT bus mall-hopper route; eliminating BAT service on six minor holidays.
• Increasing parking ticket fees; boosting fees at municipal pools; assessing credit card fees for City Hall customers.
• Using $150,000 from the city’s arena fund to pay down debts owed by Bass Park.
The expense side also includes cost-of-living increases for three sets of employees who are represented by unions — the Fire Department, airport ramp attendants and aircraft dispatchers.
Councilors did not offer any strong opinions Monday on the initial budget proposal, but they did indicate that there would be further discussion on several items in the coming weeks.
“I know it took a lot of work to get to here, but I suspect more will have to happen,” said Rick Bronson, chairman of the council’s finance committee.
Councilor Gerry Palmer said if this year represented a perfect storm, he worried about the “perfect tsunami” that could be coming next year.
The City Council will spend the next two months reviewing the proposed budget line by line, which could result in a number of changes. Finance Director Cyr also said some of the revenue projections could be updated before the council adopts the budget in late June.
Last year, the City Council passed a budget that kept the tax rate flat.
Farrar reminded councilors that for every nickel they want to reduce the proposed tax rate, they would need to find $120,000 in extra revenue or cut the same amount from expenses. To get down to the current tax rate, that translates to $2.4 million in cuts.