Lewiston councilors favor mix of taxes, cuts, to cover state revenue loss

LEWISTON — City councilors will bring a plan to increase property tax collections for the current year another 1.5 percent to their next regular meeting.

Councilors said a plan that cut another $404,000 from the city budget and increases property tax collections by $727,000 is sustainable and fair.

However, they were not happy about it and said it was unfair of the state to force them into the situation.

"Truly, we've done our work," Councilor Mark Cayer said. "The reason we've had to do what we did with our budget is clearly a shifting of taxes from the state to the municipalities. I just hope our residents recognize that. We are at a point where our flexibility is gone. If we have a major event in this city, I think we may struggle."

They'll see the budget amendments at the July 16 meeting.

Councilors adopted the fiscal year 2013-14 budget in May, before the state budget was settled. Their original plan called for $43 million in city spending and $54.5 million for education.

The overall budget would have set the tax rate at about $26.05 per $1,000 of property value — a $39 increase on the tax bill for a $150,000 home.

Legislators approved the state budget at the end of June and included a $70 million reduction in state revenue sharing. That's money from sales tax and other state revenues paid to Maine cities and towns for general fund spending.

In Lewiston, revenue sharing cuts will require the council to cut $1.1 million in spending. Covering all of that with property taxes would increase the tax rate to $26.65 per $1,000 of property value — a $129 increase on the tax bill for a $150,000 home compared to the 2012-13 fiscal year and $90 more than councilors approved in May.

The option they supported would increase the property tax rate $26.44. For homes valued at $150,000, that's $97 more than they paid last year and $58.50 more than councilors approved in the original budget.

City Administrator Ed Barrett said the city will leave vacant positions unfilled for at least three to six months to save $257,000. The city is also expecting additional revenue from the state for General Assistance reimbursements and would reduce its share of funding to L-A 911, the Auburn-Lewiston Municipal Airport and Great Falls TV, and would save money on an old city pension plan and would reduce the amount of taxes it shares with Auburn.

Councilors said they were discouraged that the state does not appear to be working with the cities and said it may be time to start looking for ways to disconnect from the state.

"We need to look toward other ways of financing the city, apart from state government," Councilor Nate Libby said. "That could be a greater reliance on fees for services and potentially asking the community how they feel about a local option sales tax."


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Councilors favor mix of taxes, cuts, to cover state revenue loss

Another Lepage tax hike!

Mike Lachance's picture

Amen Nate Libby... but there is a catch...

A Local Sales tax is something I have been supportive of for years, but without a huge reduction in propery taxes it is a slippery slope and will be extremely unpopular. On the other hand, 1.5% Lewiston Sales Tax will go pretty far, and should allow a reduction in the mil rate. Without that reduction the whole idea is counterproductive and would likely see little or no support from the citizens of Lewiston (and rightly so!)

An example of a good use of local Sales Tax; in the mid 1990's the Phoenix City Council and County leaders voted in a quarter-of-a-cent sales tax to finance the Bank One Ballpark that was to be built for the AZ Diamondbacks expansion team. The public didn't like the fact that it wasn't put to a referendum, but the tax not only paid for the ballpark, it did so nearly 6 months ahead of schedule and as promised, the council ended the tax when the budget was met. That was an example of smart use of sales tax and keeping of promises made to the public. Two things that are sorely needed in Maine.



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