STRONG — Based on the need to make up for a shortfall in state revenues, selectmen agreed to a tax increase of twenty cents per $1,000 of property valuation.

Selectmen are considered the assessors for the town, but Robert Worthley has served as the assessors’ agent for many years. He meets with them each July to plan the coming year’s tax commitment, and at their Tuesday night meeting, he explained the need to increase the current tax rate of $14.20.

“I recommend a $.20 increase in the tax rate to $14.40 per $1,000 valuation,” he told selectmen.

In March, voters appropriated $17,000 more than the previous last year.  The Franklin County tax increased by $4,500 more, but the school district’s commitment is down by $2,200.  Even though the real estate market is doing well, the town benefits from the logging industry and related tax revenue, which didn’t do well.

“We’ve gained about $650,000 in new real estate valuation, but lost ground with personal property,” Worthley noted.

The Lignetics pellet mill added about $500,000 in new equipment, but that equipment can’t be taxed by the town. The state reimburses the town for 50 percent of that tax loss, and loggers didn’t buy new equipment, due to the slow wood market. Depreciation exceeded new purchases by about $500,000.  Despite all of these fluctuations in revenues, Worthley said the major contribution to the tax rate increase was the state’s change in the Homestead Exemption reimbursement program.

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The town has 340 Homestead Exemption requests this year on primary residences. Two years ago, the legislature proposed increasing the taxpayers’ exemption from $15,000 to $20,000 for those residences. They also proposed increasing the reimbursement rate to the towns from 50 percent to 62.5 percent. Under that proposal, the entire $5,000 increase this year would have been reimbursed, he explained. Instead, the legislature stayed with the 50 percent reimbursement.

“That cost us about $850,000 in lost taxable valuation, which represents about $12,000 in taxes,” he said.

The town also sets aside money, or overlay, to cover property tax abatements and discount for payment of taxes with 30 days. Any remaining overlay lapses to undesignated fund balance, or surplus, he explained. Voters approved taking more money from the surplus account in 2017 than they had in previous years. The town voted to use $355,000 this year, compared to $310,000 last year and $250,000 in prior years.

“You were using substantially more from surplus this year than in past years,” Worthley said.

Selectmen unanimously voted for the proposal, and tax bills will go out in August.

Selectmen also agreed to change from the current Community Health Options plan offered through United Insurance to Maine Municipal Employees Health Trust. The change will cover the remaining four months of the calendar year for four full-time employees. Rates for both plans are expected to rise in January 2018.

“We will revisit before the end of the year to figure out what we’re going to do,” said selectman Mike Pond.

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