LEWISTON — The first day of spring also marked the first day of budget talks for the City Council.
Elected officials got their first look at the fiscal 2018-19 budget Tuesday night as they gear up for workshops over the next two months.
As a starting point, next year’s budget proposes a property tax increase of 4 percent from this year.
On the municipal side, including the county tax, the proposed budget is $46.81 million, an increase of $1.65 million.
During the presentation, City Administrator Ed Barrett laid out the details behind the overall increase, which include personnel costs such as regular salary increases and fixed costs such as a bump in the city’s payments on previous bonds.
Staff is also proposing to use roughly $2 million from the city’s fund balance to pay for some infrastructure projects. Ever since the economic downturn in the late 2000s, Barrett said, the city has not included any capital spending in its operating budget and has had to use other means to keep up.
He said capital projects, which are prioritized in the Capital Improvement Plan, will be a major theme of this year’s budget discussion. The budget also proposes bonding $11 million for capital projects, which is down considerably from what was proposed in the CIP.
“I have no doubt we’ll spend a lot of time on capital items in this budget,” he said.
In his budget message to the council, Barrett said the budget should “be seen as a starting point for review and deliberation and as a vehicle for the presentation and discussion of numerous issues,” meaning the final figures will most likely change.
At the beginning of the workshop, councilors said they were excited to get to work.
“It’s always a high point of the year, so it’s nice to get started,” Barrett said about the budget talks.
The roll-out of the municipal budget comes a few weeks after the Lewiston School Department pitched its budget for next year, which calls for an $8.8 million spending increase and includes 38 new positions.
Most of the school budget increase would be covered by a 17.4 percent increase in state education subsidy, but to get that state money, local spending for education has to increase.
Because of the state’s funding formula and required local share, if Lewiston taxpayers don’t spend an additional 6.1 percent for schools, the city will lose state funding at a rate of $3 for every $1 not spent locally.
According to Barrett’s presentation, none of Lewiston’s utilities will require a rate increase next year. However, he told the council that by the following fiscal year, each of Lewiston’s utilities would most likely be losing money.
With the proposed tax rate increase as it stands, a home valued at $75,000 would see a $70 annual property tax increase; a $150,000 home would see $154 more; and a $250,000 home would see a $266 higher tax bill.
According to Barrett, the council also has the option of hurrying to issue bonds in the current fiscal year, before interest rates are expected to rise. He said if the city issued bonds in May and deferred the first principal payment to the next fiscal year, the city’s part of the tax rate would fall from a 51-cent increase to an 18-cent increase.
However, he said the decision would have to be made by next week.
The council will, on average, hold two budget meetings per week until the budget is adopted this spring. The city had previously released its budget schedule, which takes the council through May.
By city charter, the latest a budget can be approved is May 30. The first public hearing on the budget is scheduled for April 3.
The council and School Committee will meet for a joint workshop at 6 p.m. Monday, March 26, at Lewiston High School.
Over the course of budget discussions, the council will also have to consider adding 13 new positions as part of the requests from city departments. Adding all the positions would cost roughly $766,000.
Among them are an assistant city clerk position, a civil document server and a fleet manager for the Police Department, and a field officer for Social Services.
As usual, Barrett said, the city will also be keeping a close eye on Augusta as budget talks unfold at the state level. He said a potential increase in the homestead property tax reimbursement from 50 percent to 62.5 percent is just one of the things he’ll be watching.
Another, he said, is the state potentially drafting changes to bring its income tax system in line with the federal tax reforms.
This table shows the current and proposed property rax rate in Lewiston based on the fiscal 2018-19 budget.
Source: City of Lewiston
The entire proposed budget can be viewed on the city’s website, or by clicking here.