By Scott Taylor,Staff Writer

LEWISTON – The city could be spared a tax rate hike for the third straight year, thanks to $280 million in new development, according to City Administrator Jim Bennett.

Bennett presented his $79 million municipal and school budget to the City Council on Tuesday. Bennett’s budget calls for $3.8 million more in spending compared to the current fiscal year. That’s a 5.1 percent increase.

But new property tax revenues from construction plus more state aid to education mean that taxes for most most homeowners should go down – a little.

“For most people, it amounts to $150 for 12 months,” Bennett said. “That’s not a lot, but it’s something.”

The public gets a chance to discuss the budget with councilors at a March 31 public hearing. Then councilors begin a rigorous twice weekly schedule of budget hearing continuing through April and into May. The council needs to adopt the budget by May 24, according to the city charter.

State aid

State efforts to relieve property taxpayers helped and hurt. The state looks to double the homestead exemption from $7,500 to $13,000. The state reimburses the city for only half, however.

That means the city needs to come up with $1.1 million to cover that difference.

“The result is tax relief targeted to people that live in their own homes instead of people that own businesses or apartment buildings,” Bennett said.

But increases in state money to the schools reduces their share of property taxes by $1 million.

“You’ll see that what we save from the schools is almost exactly what we need to pay for the homestead exemption,” Bennett said.

City money

Debt payments led the budget increases. They would increase 9.4 percent from $7.4 million in 2005 to $8.1 million in 2006. Salaries and wages for city employees look to increase by $723,000 in 2006, based on a 2 percent cost of living increase for nonunion employees and a 2.2 percent increase for union employees.

Remaining costs at the Bates Mill, support for the expanded public library, work on a new Lisbon Street parking garage and gas and fuel increases all account for another $271,000 in cost increases.

The budget calls for no new employees, no new programs other than the cultural center at the Lewiston Public Library. It doesn’t cut services either, and includes a 15 percent increase in water rates to pay for two new water tanks south of downtown.

“That we are able to do that shows that the investments we have made in the past few years are paying dividends,” he said.

New Value

New businesses investment downtown has resulted in $170 million in value since 2002 and $791,000 in new property taxes. Citywide, property values have increased $280 million since 2002. That includes 565 new housing lots around the city and 251 residential dwelling units since 2002.

“The outside world has begun to realize that Lewiston is a good place to be and good place to live,” Bennett said. “If that wasn’t true, you couldn’t see this kind of residential development.”

He predicted it wouldn’t stop. The city is hoping to bring as many as four large retail stores to the area around the turnpike exit and Lisbon Street. That would mean 700,000 square feet of retail and another $1.5 million in property taxes.

Continuing development at the Bates Mill should bring in another $130,000 in taxes. The redevelopment of the Cowan and Libbey mills should bring in another $600,000 in taxes. Even Bates Mill is planning $30,000 in investment over the next 20 years.

“People say they are waiting for the debt from our investment to catch up to us, but it doesn’t have to,” Bennett said. “The other shoe does not have to drop if we keep making the right decisions.”

20 cents

Bennett also wants to privatize the city’s landfill. The city will have to spend millions to expand it over the next decade on its own.

“When you consider the expansion, the debt and the new tax revenue we could get, privatizing it saves $26 million over the next 30 years,” Bennett said. The city would charge the landfill’s operators $1 million, and that money would buy down the tax rate 20 cents a year for the next three years.

Bennett’s presentation was shown twice Tuesday night on Great Falls TV – live at 5:30 p.m. and again at 7 p.m. It’s scheduled to be shown a third time at 7 p.m. Friday.

2006 budget highlights

• State aid allows the schools to use $1 million less in property taxes. That money covers increased city costs from the homestead exemption.

• The expanded homestead exemption would reduce homeowners’ tax bills by $134 to $249, depending on valuation.

• Water rates would increase about $24.44 per year for the average homeowner.

• Savings from privatizing the municipal landfill would let the city cut the tax rate by 20 cents per year for the next three years.

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