June 14, 2013

Portland finance panel settles on $1.1M more in cuts

The cuts are needed to make up for the loss of state revenue that had not been accounted for.

By Randy Billings rbillings@pressherald.com
Staff Writer

PORTLAND – The City Council's Finance Committee decided Thursday to recommend cutting an additional $1.1 million from its previous recommendation for the next year's municipal budget.

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Portland's Finance Committee decided Thursday to recommend cutting an additional $1.1 million from its previous recommendation for the next year's municipal budget.

Gordon Chibroski / Staff Photographer

The cuts are needed to make up for an anticipated loss of nearly $1.9 million in state revenue that was not accounted for in the committee's previous budget recommendation of $216 million.

Gov. Paul LePage's original budget proposal would have eliminated about $200 million in revenue-sharing statewide. That would have resulted in a $6.1 million loss of revenue to Portland.

But the Legislature was voting Thursday night to enact a revised budget that reduced the cut in revenue sharing to $75 million. Now, the city expects to lose $1.9 million.

City Manager Mark Rees outlined various ways to balance the budget for municipal services in 2013-14, including eliminating 12 full-time positions.

But the committee endorsed only two personnel cuts – a customer service representative in the finance office and a building custodian.

City Councilor and committee Chairman John Anton said the committee's vote highlighted the city's priority to maintain its work force.

"I think what we essentially did is recognize the importance of our work force to keep the cuts away from them," Anton said. "Wages were frozen, plans to rectify some wage inequities were postponed, and a lot of supplies and materials we should be buying, we forwent."

Councilor David Marshall stood alone in opposing many of the cuts. The city's budget problem is being caused by the state cutting its revenue-sharing program, not by any action by the city, he said.

"I'm not interested in being party to a lot of reductions here," Marshall said. "When I look at those services, they're services the public needs and wants."

Revenue sharing returns a portion of the sales and income taxes generated in cities and towns. It is designed to reduce municipalities' reliance on property taxes to fund services.

Rather than making cuts, Marshall advocated for the city to increase property taxes, while setting up a local program to help offset the increase on low-income residents.

The committee agreed to consider such a program at a future meeting. The largest cut endorsed by the committee would eliminate $250,000 for the implementation of recommendations in a study of nonunion wages. Rees said changes to nonunion wages are needed to make the city more competitive in attracting and retaining employees, and to address pay inequities and improve morale.

Another $200,000 in cost-of-living wage increases for union and nonunion employees was eliminated, as was $100,000 in overtime expenses previously budgeted for the fire department.

The committee was split 2-2 on another $170,000 in potential cuts, including eliminating two firefighter positions and a records clerk in the police department. Those items stayed in the budget recommendation.

The nearly $215 million municipal budget, plus the school department's $96.4 million budget, would increase Portland's property tax rate by 3.1 percent, to $19.41 per $1,000 of assessed value. That would add about $118 to the annual tax bill for a home with an assessed value of $200,000.

The City Council will hold a budget workshop Monday and could potentially vote on a budget June 24, Anton said.

The Finance Committee also discussed the school budget, which eliminated about 50 positions and has already been approved by voters. That budget did not account for a potential shift in teacher pension costs to the district.The school will now have to increase its budget by nearly $1.4 million.

City officials are still debating whether that would require the city to hold another budget validation referendum.

City attorney Danielle West-Chuhta offered a legal opinion that the city would have to put the school budget back out to voters for approval. However, Mayor Michael Brennan said he was working with the city's legislative delegation on a "legislative remedy" that could prevent the city from holding an additional budget referendum.


Randy Billings can be contacted at 791-6346 or at:


Twitter: @randybillings


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