JAY – Selectmen agreed Tuesday to table setting the 2005-06 tax rate after one of three selectmen present said he could not support any of the proposed rates offered.
Selectmen will take up the issue at 6 p.m. Monday, Aug. 29, at the Community Building when a full board is present.
Selectman Alan Labbe said he didn’t think it was right to ask taxpayers to raise more money than needed to cover the expenses of the town. He said there must be better planning in the budget process to avoid setting a higher tax rate.
Town Manager Ruth Marden and selectmen Chairman Bill Harlow both said it is difficult to plan for everything.
Money left over at the end of the fiscal year would be brought back to voters to decide whether it should be used to offset the next year’s tax rate. The remainder is put in overlay.
This year, voters approved using $300,000 out of overlay to reduce the tax rate and in 2004, they voted to use $225,000 to offset the rate.
Marden recommended setting the tax rate Tuesday at $16 per $1,000 of valuation, 30 cents lower than last year. That rate would give the town an estimated $766,487 in overlay. Overlay covers any special town meetings, emergencies and tax abatements.
The town’s general fund contains an estimated $4.3 million, on paper. Marden said the fund should contain about $5 million, to cover the cost of town operations for at least three months.
The town’s appropriations for 2005-06 total nearly $20.9 million, but after subtracting the nearly $3.8 million in anticipated revenues, it leaves about $17.13 million to be raised by taxation. Of the $20.9 million, $954,896 is for county taxes, $5.7 million is for municipal operations, and $10.6 million is for school operations.
A few years ago the town did have $5 million in the general fund, but that was reduced over several years after voters approved transferring $1.1 million from the account to cover $882,000 in school expenses and $235,000 in municipal expenses.
Marden recommended the rate, she said, to build up the town’s general fund. She said that with the current economic situation, with the town’s having an outstanding tax payment of more than $1 million, and with the uncertainty of what will happen with jobs once International Paper restructures and sells its Jay paper mill, the town needs to plan for the worst-case scenario.
Androscoggin Energy LLC, a natural-gas-fired power plant, filed for Chapter 11 bankruptcy protection in November. It owes more than $1 million in back taxes to the town from the first half of the 2004-05 tax year. Once the court case is resolved the town expects to be paid back taxes.
Assessing agent Paul Binette gave selectmen four proposals of tax rates ranging from $15.70 per $1,000 valuation to $16 per $1,000 of valuation. If selectmen opt to go with the $15.70 per $1,000 of valuation, it would give the town a $499,191 overlay.
The town may collect only 5 percent more than what officials intend to spend, Binette told selectmen.
The minimum tax rate selectmen could set is $15.31 per $1,000 of valuation, and the maximum rate is $16.08 per $1,000 of valuation, Binette said.
If selectmen agree with Marden’s recommendation, a taxpayer with a home valued at $100,000, minus the homestead exemption, would pay $1,392 in taxes, $123.90 less than last year, Binette said. Businesses and second-home owners do not qualify for the exemption.
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