WESTBROOK – Westbrook city and school officials are preparing for upcoming budget discussions against a background of potentially devastating state budget cuts.
According to a review by City Administrator Jerre Bryant, Gov. Paul LePage’s budget proposals could impact the municipal and school funding by as much as $3.3 million – the equivalent of $1.82 per $1,000 of valuation on the property tax rate.
Bryant, along with school Superintendent Marc Gousse, Tax Assessor Elizabeth Sawyer, Comptroller Alicia Gardiner and General Assistance Coordinator Sarah Lundin, have begun discussions about strategies to combat the potential blow to residents.
“We’re trying to be realistic,” Bryant said. “They’ve got a huge hole to fill in Augusta. Everybody’s in a very similar boat.”
LePage’s proposed two-year budget, along with a proposed supplemental budget, suspends municipal revenue sharing, the city’s second largest non-property tax revenue source. That could mean a reduction in income to the city of approximately $1.5 million during the next two years, or 80 cents on the property tax rate, according to Bryant. The city’s 2012-2013 budget is $23.1 million.
Westbrook’s largest non-property-tax revenue stream is also being hit. Excise tax on all motor vehicles registered in Westbrook stay in the city. But the new proposed budget would send that money, approximately $50,000-$75,000 annually, to the state.
Bryant said the excise tax income has decreased in recent years due to the economic downswing. Less money in the pockets of consumers means people are waiting longer to buy new cars, and older cars are taxed at a lower rate.
Changes to the Homestead Property Tax Exemption program, which gives some homeowners a $10,000 exemption on property tax, and the circuit-breaker program, another exemption offered by the state, will not directly affect funds coming into the city, but they will affect residents. The proposed changes would make some residents who are benefiting from these programs ineligible in the future, which means hikes on their tax rates of up to an additional $174 per year, according to Bryant.
“They’re getting hit on both sides,” Bryant said.
The school department is already dealing with the loss of $205,000 of anticipated revenue due to the curtailments of state aid. Westbrook schools started the 2012-2013 fiscal year with a budget of $30.8 million.
Another proposed budget change from the state would require school districts to pay half the employee contribution to teacher pensions, an increase of more than $1 million.
The state budget is in the early stages, and Westbrook hasn’t begun figuring either the municipal or school district line items. Bryant said he expects the city’s budget to be completed before the state’s is finalized.
Bryant said the city has looked at ways to lessen the burden on taxpayers, but in the end, it could come down to making tough decisions, such as curtailing services by keeping fewer public safety workers on duty or finding a way to bring more income into the city.
“I think this year will be more challenging than most,” Bryant said.
Budget discussions at the City Council and School Committee level are anticipated to begin at the end of March or beginning of April.