POLAND – Poland’s money mistake – a $2 million budget shortfall created by six years of town office math blunders – could be even higher.
The error, discovered in an audit of the town’s books, didn’t include this budget year, which ends in two weeks.
“It could be a lot higher,” Selectman Wendy Sanborn said of the amount Thursday. “I don’t know.”
Sanborn and other town leaders hope to get some answers on Tuesday, when they are scheduled to sit down with administrators and with auditor Bruce Nadeau of Auburn.
One possible fix: higher taxes.
Poland’s problem is a sticky bit of math.
Like all towns, Poland figures its tax rate by comparing the money it needs to raise against the total amount of taxable property in the town.
However, property meant to be shielded from the town’s value – via tax increment financing deals with the Poland Spring Water company – was accidentally included in the calculation, Nadeau said Thursday.
By doing that, the tax rate, just over $21 per $1,000 of valuation, was kept artificially low. Less money than budgeted was raised, since the taxes taken from the water company were, as planned, set aside for special projects.
Slowly, the town slipped into the red.
“This is going to have a big impact,” Nadeau said in an interview Thursday. “But they have a lot they can do.”
Cash reserves might be able to take away some of burden, Selectman Reginald Jordan said. The town has well over $1 million in cash, earmarked for other areas but potentially useable, he said.
The tax rate might also need to be raised, he said.
“It could be,” Jordan said. “That’s a decision the town selectmen are going to have to make.”
Either way, he said he is happy the error was found before more time passed. Since 2000, the calculations have been wrong. However, the tax deal with the company is planned to continue until 2020.
“Thank God, we found it now,” he said. “It was an honest mistake.”
Yet, it’s a mistake which Sanborn worries could affect people across the town.
“I think the taxpayers are going to be picking up the tab,” she said. “I’m upset about it. It’s unconscionable, really.”
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