RUMFORD – The town’s previously adopted 2005 budget has been cut by nearly a half-million dollars to comply with the state-mandated tax cap approved by voters last year.
Previously, town officials thought that about $120,000 would have to be cut to fit within the state mandate.
Voters had authorized exceeding the state mandated tax cap limit at the annual June town meeting by a show of hands. The town then learned that such a vote could not be taken by a show of hands, but had to be decided by secret ballot. When a special town meeting was held last month, voters overturned their approval.
Since then, the figures on the paper mill’s valuation have come in, and the effect of the larger Homestead Exemption was figured in.
Eldridge said Thursday that a combination of $9 million less in valuation from NewPage Corp. and $10 million less in valuation due to a doubling of the state-allowed Homestead Exemption resulted in the larger cuts.
Selectmen on Thursday authorized him to make the appropriate reductions. These include a 10 percent across the board reduction in money approved at the June town meeting for social service agencies and other special money requests such as Black Mountain and the Greater Rumford Community Center. The total saved from those accounts, known as initiated articles, is about $35,000, Eldridge said. Included are reductions of $10,000 from Black Mountain and $17,000 from the GRCC and its swim program.
The town’s capital reserve accounts and permanent road fund were also affected. About $300,000 will come from the road fund. Eldridge said reducing the road account will leave enough money to do what has to be done; however, emergencies won’t be covered and some roads planned for paving in the town’s five-year highway plan won’t be paved.
Reductions from the capital funds of other departments include: $10,000 from the Fire Department; $10,000 from the Police Department; $12,000 from the Parks Commission; and $50,000 from the sewer extension fund.
“The town has done an excellent job of putting away money for capital replacements. This has undermined that program,” he said Friday morning.
Also cut was $3,000 from a special account set up to honor veterans. He said a $25,000 unanticipated savings for insurance was also included.
Last year’s tax rate was $18.63 per $1,000 valuation. The tax cap allows a rise to $19.15 per $1,000.
“We could have set a higher tax rate if voters had approved,” he said.
The exact amount of cuts needed to meet the state mandate and the precise tax rate won’t be known until the town’s audit is completed at the end of August. The tax rate will be set at the Sept. 1 selectmen’s meeting.
Despite the cuts, he said all services will be continued and all employees will keep their jobs.
However, he believes capital funds will be restored next year, and a cap may be placed on the amount of money the town will be asked to raise for initiated articles.
He said an article asking residents to approve a higher tax rate than allowed under the state mandate will be on the annual town meeting warrant in June 2006.
“This town has not had an increase in its budget for many years,” he said, adding that the valuation at the mill will likely go down each year as well.
The town’s valuation fell from $622 million to $603 million. The overall budget will now be about $14.4 million. This includes school and county tax.
“Towns with the least amount of growth were hit the hardest by the tax cap,” he said.
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