JAY — Selectmen voted Monday to set the tax rate at $13.45 per $1,000 of property value to cover expenses for 2011-12.

It is a 45-cent increase over last year’s tax rate of $13.

It increases the taxes on a property valued at $100,000 by $45 a year, not factoring in exemptions.

It gives the town a $269,840.79 overlay to cover abatements and other eligible expenses. The town used nearly all of its $356,000 overlay last year, Town Manager Ruth Cushman said.

She gave the board the option of setting the rate between $13.40 and $13.50 but said she was concerned if selectmen went with the lowest rate it could put the town in financial jeopardy.

The town has to have enough to carry it from July 1 until the tax money starts coming in, in the fall, Cushman said.

“What we need to do is have enough overlay in case the budget does not pass,” board Chairman Steve McCourt said.

If the board went with $13.50 there would be an overlay of $314,782 compared to the past year’s $356,000, he said.

The board could go with $13.45, he said, but the town would have to pinch pennies if anything happened such as the state decreasing the town’s revenue again.

According to the 2011 tax rate calculation form, the minimum the board could have approved was $13.22 and the maximum was $13.88.

McCourt reviewed a decade of the town’s tax rates that fluctuated from $15.80 in 2001-02 and rose to $16.30 in 2004-05. It dropped the next year to $16 and after a revaluation it decreased to $14.25 in 2006-07. It went lower to $13.85 in 2007-08 and settled at $13 for the past three years, he said.

“We did well last year to keep it at $13,” McCourt said, but things have changed.

The town is anticipating about $400,000 less in revenue and expenses have increased in town, school and county budgets, he said. In 2010-11 the town’s commitment was $14.96 million.

The town’s total commitment for this year is nearly $15.7 million. The town’s share of Regional School Unit 73 is $8.16 million compared to $7.94 million when the school system was part of the town. State revenues for education also decreased this year.

The town’s share of Franklin County government also increased from $959,250 to $965,055. And the municipal government budget rose from $6.18 million to $6.29 million. Anticipated revenues decreased from $2.4 million to $2.09 million.

McCourt also reviewed a list of towns that have mills and tax rates for 2010-11. The rates ranged from $24 in Rumford to $12.52 in Bucksport. Jay had the second lowest at $13 and Millinocket had the second highest at $22.80.

According to the Bureau of Revenue Services, the average tax rate in Maine including plantation is $13.84, McCourt said. The average tax rate in the state, excluding plantations and considering only organized municipalities is $14.11, he said.

Resident Al Landry asked selectmen to keep the tax rate as low as possible. He said there are lot of retired people in town struggling to pay bills and senior citizens have not received a raise in their social security checks for three years.

Selectman Tom Goding asked if there was any place to cut in the budget. He said he was concerned about the people who could not afford to pay their taxes.

Cushman said it is too late. Voters set the budgets for town and school during votes and the county budget was set by a Budget Committee and commissioners.

“We literally can’t keep (the rate) at $13,” she said.

Selectman Tim DeMillo said the biggest expenses for the town is personnel and fuel and oil.

Selectmen discussed the rate, not wanting to take out tax anticipation notes and pay interest, and cutting expenses next year.

“At some point we need to cut expenses some where,” Goding said. He did note that selectmen cut expenses this year in areas they could.

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