DIXFIELD – Residents will be asked to approve taking an extra $100,000 from surplus at a special town meeting next week in an effort to keep the tax rate down.
At a joint meeting of the selectmen and Finance Committee on Monday night, the board scheduled a special town meeting for 6 p.m. Sept. 8 at Dirigo Middle School.
At issue is whether to take $63,000 from surplus, as approved by voters at the annual town meeting in June, or some higher figure.
If selectmen had stayed with the smaller amount, the tax rate could have gone to $31 per $1,000 of assessed valuation. This current year’s rate is $26 per $1,000 valuation, the same as it was last year.
When the board voted to set the special town meeting, the consensus was for an additional $100,000, which would result in a tax rate of $29 per $1,000 valuation.
Town Manager John Madigan said that if the $100,000 were approved, the town would still have about $500,000 in surplus, with the possibility of more coming later in the year due to a variety of expected revenues, such as Federal Emergency Management Agency reimbursements, continued savings by sharing a town manager with Mexico, and retirement interest.
To keep the tax rate at the current level, the town would have had to use more than $300,000 in surplus, a figure Madigan and Selectman Eugene Skibitsky believe would put the town at risk for a significant raise in the tax rate in a year or two.
For towns the size of Dixfield, with a budget of nearly $3.4 million including school and county taxes, Madigan said the surplus should be between $340,000 and $500,000. Surplus funds provide towns with enough cash to pay bills until property taxes start coming in.
With the possible $29 tax rate, the town would also have just over $30,000 in overlay funds that could be used to pay tax rebates, if necessary. If that money isn’t used, then it goes into the following year’s surplus.
The state Homestead Exemption is affecting the higher tax rate. The state boosted the homeowner exemption to $13,000 this year, but will reimburse municipalities only $6,500.
Madigan said homeowners would likely see an increase on only 1 mill in their property taxes despite the tentative 3-mill increase because of the exemption. Second-home owners and businesses would see the full 3-mill increase.
Selectmen will meet after the special town meeting to set the tax rate. The first half of property taxes are due Sept. 15 and the second half are due April 15 without penalty.
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