Lewiston property taxes would rise sharply under proposed city budget

LEWISTON — Despite dipping into its rainy-day funds for millions of dollars, Lewiston is eyeing a 21% property tax hike in the coming fiscal year to keep up with soaring expenses for its schools, police and more.

The proposed $60.5 million municipal spending plan, which will be presented to City Council members Thursday, would increase the annual property tax bill for a homeowner living in a house valued at $250,000 by more than $1,400.

In a 13-page budget memo by City Administrator Heather Hunter, she said the plan calls for a 13% increase in spending by the city and a 7% hike in school expenditures — amounts that make both her and school Superintendent Jake Langlais “uncomfortable.”

Chances are the figures will leave decision-makers, who face the voters in November, feeling even more uncomfortable.

Since 2020, Lewiston’s property tax rates have been steady. This year’s proposed budget would raise them by 21%.

While officials typically pare proposed budgets, resulting in smaller tax hikes than initially sought, an increase so large will be difficult to bring down to the levels residents have seen in recent years. Taxes have been steady since at least 2020.

Hunter said in her memo, though, that the “the economic reality” of rising costs of personnel, utility and fuel are driving this year’s request.

Two-thirds of the increase is driven by rising personnel costs, Hunter said.

The Police Department is seeking $2.2 million more than it got in this year’s budget, with its patrol and criminal investigation units each seeking about a third more money than in last year’s spending plan.

That’s the price of fixing what Hunter called “a public safety crisis in our police department” that occurred last fall.

She said the department had a dozen vacancies and six other officers looking for better-paying jobs elsewhere.

“In meetings with the council, union and senior management, we collectively determined our Police Department needed to be one of the leaders in the state in wages to attract and retain personnel given the current challenges as a service center community,” Hunter said, so officials implemented a new wage plan.

As a result, she said, “Instead of being the police force that other municipalities cherry-picked, Lewiston became the cherry-picker, not only for entry personnel, but seasoned officers making lateral years of service moves.”

Hiring experienced officers meant the city didn’t have to pay for their training or wait a year for them to be able to patrol without a partner, she said.

“Now we are almost fully staffed,” Hunter said, “but it comes at a big cost to stay competitive.”

She said the city is looking now at “a comparable crisis” with emergency dispatchers, which will also likely require more spending to fix.

But the increase is driven by a wide range of factors.

Everything from software licensing to the salt and sand used by Public Works for winter roads will cost more, Hunter said.

And though revenues are going up, too, they aren’t expected to keep pace.

Hunter said non-property tax revenue should reach $16.5 million or more next year, the highest total Lewiston has seen. It will be the first time the city surpasses what it raised in the 2008 fiscal year, just before state revenue-sharing took a nosedive.

She said estimates of the money that might come, from sources as diverse as automobile excise taxes and fees paid for apartment building trash collection, are conservative because it is “unclear if we have truly weathered the full impact of the inflationary economy.”

The city plans to use $6.5 million from its fund balance, the reserves it keeps for emergencies and other financial necessities, reducing its overall balance from 17.8% of its budget to 13.6%, which is still higher than its state policy of keeping a rainy-day fund equivalent to 8 to 12% of its annual budget.

The Government Finance Officers Association recommends that governments keep at least enough money in what it calls “unrestricted budgetary funds” to cover two months’ of operations, or about 15% of the annual budget.

Throw in the amount of reserve cash the schools are eyeing for next year’s use, though, and the city and education budgets together are eyeing $11.7 million in rainy-day money to pay for projects and budget lines.

Hunter’s memo to the council said explicitly that councilors “should recognize that there is no guarantee that such a large amount will be available in future years,” especially for the schools, which may mean that holding tax increases in check may get even harder.

Thursday’s council session is slated for 5:30 p.m. It had been scheduled for Tuesday evening but was pushed back a couple of days.