STANDISH – Standish residents opening their tax bills this week should be prepared for a jolt, as the property tax rate is jumping 9.5 percent this year.
However, says Standish Tax Assessor Peter Arnemann, the news isn’t as dire as it first appears since home valuations have gone down about 5 percent this year in the town, lessening the blow of the increase in the tax rate, also known as the mil rate, from $10.36 per $1,000 of property value last year to $11.60.
The decrease in home values is determined by the ever-changing housing market. In order to keep up with the market, Standish has lowered its assessments 5 percent for the past two years. But, with lower home values come higher tax rates, even if in the end the same amount of money is collected.
“The mil rate would have been lower if we hadn’t made those market adjustments,” Arnemann said. “It’s a balancing act. In the end, you have to pay the same amount. We have to pay the schools, we have to pay the county. We have the same bills no matter what the assessments are. If the assessments are low, then the mil rate tends to be high.”
While decreased home values play a part in the tax rate increase, so does government spending. Standish residents pay for municipal, School Administrative District 6 and county taxes, each of which tell a different story.
County taxes actually went down this year, from $612,000 in 2011-2012 to $610,000 for 2012-2013.
On the municipal side, Town Manager Gordon Billington said spending is going down in 2012-2013, as well. Last year, Standish spent $7.43 million total. Of that, $1.4 million went to an aggressive capital improvement campaign, which replaced a number of town vehicles including a new animal control van, a new rescue unit, used boat, and a new public works truck. The money also went to buy firefighter turnout gear, a new server for the assessing department, and rehabilitation of recreation fields. About $430,000 went to purchase land at Oak Hill Road and Route 25 for a proposed intersection realignment proposal. Voters rejected the proposal in June, but Billington said the council would likely bring up the topic once economic conditions improve, so the land will stay in town hands.
With little capital improvement funds budgeted this year, the total municipal budget has fallen to $6.24 million for 2012-2013.
“We were focusing to hold the municipal side. The tax bill doesn’t go up as much as the rate does,” Billington said.
The major impact on the tax rate is the school bill, which according to SAD 6 business manager Bill Brockman is increasing to $8,312,980 in 2012-2013, from $7,770,724 this past year.
According to Brockman, the school budget is up due to the loss of significant federal and state subsidy. In 2011-2012, the school district received about $900,000 in federal stimulus funds from the American Recovery and Reinvestment Act. That money, which helped keep teachers employed last year, is no longer available.
The district is also losing more than $100,000 from state subsidy for education. Due to how the state calculates its subsidy, Standish is considered a comparatively wealthier town so its residents have to pay a proportionally higher amount to fund local education. Overall, state subsidy for SAD 6 amounts to $20.27 million this year, compared to $20.33 million last year.
“One, there was a commitment to ensure that the taxpayers had a fair and equitable school budget budget, but, two, there was a commitment that we would never diminish the opportunities or hurt kids in the process,” Superintendent Frank Sherburne said of the budget process. “I think we’ve lived by both.”
While the subsidy has only decreased slightly for the district as a whole, Standish residents are impacted more significantly than other district towns since the state, through its complicated funding formula, takes into account valuation and the amount of low-income residents. Therefore, Standish property owners will pay 6.97 percent more than last year. Taxpayers in the district’s four other towns of Buxton, Limington, Hollis and Frye Island, will see an average 3 percent increase.
The school board, Brockman said, knowing it would likely lose what amounts to more than $1 million in state and federal subsidy, did its best to trim the budget, eventually approving an overall .83 percent increase to $42.6 million. In the process, the district eliminated 26.5 teaching and support staff positions, saving about $1 million.
“We did the best we could to keep the budget just about flat-funded. A .83 percent increase is a pretty small one, but as it shakes out because of the revenue side, we didn’t have any choice,” Brockman said. “Because of loss of revenues, it actually resulted in the increase of the local tax rate of 3.09 percent. And the share for Standish, because of the differences in state valuation, had the biggest increase at 6.97 percent.”
Because of the effective increase in the tax rate, Arnemann, who has worked in Standish for many years and has seen tax rates rise and fall as the market fluctuates, is ready for his phone to start ringing once those tax bills, due Nov. 16, arrive at taxpayers’ homes.
“I do expect to get some calls,” Arnemann said. “And I’ll do my best to try to explain it. I think people can understand bad news if it’s explained to them.”