WISCASSET, Maine — Facing a 14.1 percent hike in tax bills, the Wiscasset Board of Selectmen voted Tuesday to use $1 million of the town’s fund balance to reduce the tax commitment for 2016-2017.
The board’s decision to use about 58 percent of the fund balance to reduce the bill for Wiscasset taxpayers was split 3-2, with Chairwoman Judy Colby and David Cherry opposed.
The motion was made and passed against the advice of town auditor Chris Bachman of RHR Smith, who recommended maintaining a fund balance that would cover at least 30 days of town expenses, which total about $11.9 million for 2016-2017.
The projected property tax rates for 2016-2017 considered on Sept. 6 were based on estimates with the use of surplus capped at $600,000, the maximum recommended amount by the auditor. Selectmen must meet again to consider reconfigured numbers, sign the tax commitment, and establish the property tax rate for 2016-2017.
Even with $1 million of the estimated $1.7 million fund balance put to use, the current property tax rate of $16.40, or $1,640 for every $100,000 in assessed value, will still increase, selectmen said.
Taxpayers would have seen a 14.1 percent increase in their tax bills, from $16.40 to $18.71, with the use of $600,000 in surplus, according to the projected rates.
With the tax commitment reduced by an additional $400,000, the $18.71 property tax rate will be reduced by less than $1. According to Bachman, each $1 added to the property tax rate is equivalent to about $452,000.
The pending increase in the property tax rate is the reason Selectman Ben Rines set a goal to show the impact of budgets on the rate during the budget-setting process in 2016-2017, he said. Several budgets approved by voters would not have passed if voters were aware of the impact they would have on their tax bills, Rines said.
While Colby recognized the 14 percent increase was “big time,” she pointed to the $1.5 million that was already withdrawn from the town’s reserve accounts to keep the property tax rate stable after townspeople voted to withdraw from Regional School Unit 12.
“This was eventually going to come back to bite us,” she said.
Voters at the time were well aware of estimates that the withdrawal from RSU 12 would cause a 22 percent to 25 percent increase in taxes, Colby said.
While a minor contributing factor to the increase in the 2016-2017 tax commitment was a 5.6 percent, or $30,691 increase in the county tax bill, which rose from $547,354 in 2015-2016 to $578,045 in 2016-2017, the majority of expenditures driving the tax commitment were approved by voters, Colby said.
Wiscasset’s total appropriation of $11,925,140 for 2016-2017, which includes county tax, school, and municipal government spending, is a 7.9 percent or $876,426 increase from the previous year’s appropriation of $11,048,714, according to a financial report presented by Town Manager Marian Anderson.
The bond payment to fund the withdrawal from RSU 12 and a 67 percent increase in the Wiscasset Ambulance Service budget drove the increase in the municipal budget. The budget rose by 9.49 percent or $459,895 from about $4.8 million in 2015-2016 to $5.3 million in 2016-2017, according to the report.
The local share for the Wiscasset School Department budget also increased by 6.82 percent, from about $5.6 million in 2015-2016 to about $6.03 million in 2016-2017, according to the report.
Colby and Selectwoman Judy Flanagan noted the strong support the budgets received at the polls.
“Residents voted for the school budget, the withdrawal from RSU, and EMS,” Flanagan said. “We went through the process and this is what we have.”
Flanagan voted in favor of using $1 million to offset the burden to taxpayers. Colby, however, was opposed to using more than the recommended amount of the general fund.
“All it’s doing is delaying the inevitable,” Colby said. “What’s going to happen next year?”
Selectmen will meet again in the near future to sign the tax commitment and establish the property tax rate for 2016-2017.