GREENE – The town manager told selectmen Monday night that there is a potentially devastating impact on municipal services if voters approve a proposed 1 percent tax cap.

Under a worst-case scenario presented to the board, consequences could include Public Works and Town Office employee layoffs and municipal services reduced from five days to one each week, Town Manager Stephen Eldridge said.

Modeled after California’s Proposition 13 tax cap in 1978, the citizen-driven referendum by Carol Palesky and the Maine Taxpayers Action Network has garnered enough signatures to place the tax cap on the ballot.

In addition to the 1 percent or 10-mill cap, the proposal would scale back assessed values to their 1996 level. The proposal would allow for additional property tax assessments to cover the payment of debt service.

Greene’s current tax rate of $18.30 is expected to increase by $1.30 to $1.60 after the SAD 52 board sets the school budget in June. Taking into consideration the lower valuation in 1996, the proposed cap would leave Greene with less than half what it needs to operate, he said.

Eldridge said that if voters approve the proposal, the town could not operate. He reminded the selectmen that payments to SAD 52 are the town’s first priority by law. The second priority mandated by state law is county taxes.

The fiscal year 2004 municipal budget is $1,620,205. The proposed 1 percent tax cap would leave the town about $187,000 to operate after SAD 52 and Androscoggin County are paid, according to Eldridge. The town’s payroll is about $30,000 per month, he said.

“The cost to run the transfer station just this past year is $225,000. What are you going to do about your garbage?” he asked the selectmen. “This is how devastating the Palesky bill could be.”

Eldridge said the referendum could get considerable support from Portland property owners whose taxes have recently doubled and tripled, in some cases, following a revaluation in that city.

According to an analysis by the Maine Municipal Association, passage of the tax cap could result in a loss of $950 million in local property tax revenue statewide in 2006, representing 48 percent of property taxes currently collected.