Sunday, March 9, 2014
PORTLAND – The city of Portland could lose more than $10 million in state aid if the governor's proposed budget is approved by the Legislature, but the city manager's 2013-14 budget does not take into account that potential loss.
City Manager Mark Rees presented his $216 million municipal budget to the City Council on Monday night. It would increase overall spending by $10 million, or 5.8 percent, over the fiscal year.
Rees told the City Council that his spending proposal was predicated on the Legislature not approving the governor's budget, which would suspend revenue sharing with municipalities and reduce General Assistance reimbursements.
Councilors accepted Rees' budget before voting unanimously to support a resolution that opposes the governor shifting the burden of funding state government onto municipalities and local taxpayers.
"These proposals (from the governor) will dramatically increase property taxes in the city of Portland, taxes which often are unrelated to the ability of property owners to pay, and will require spending reductions which call into question our ability to protect the health, safety, and welfare of our community," the council resolution said.
Nicole Clegg, the city's spokeswoman, said the City Council's Finance Committee will meet at 5:30 p.m. today to begin a review of the city budget, a process that will culminate May 20 with final adoption.
The council has not seen the proposed school budget yet but is scheduled to vote on the school budget May 6.
A citywide referendum on the school budget must be held May 14 before it can receive final approval.
If approved without any changes, Rees said the city budget would add $70.37 a year to the property tax bill of a taxpayer whose home is valued at $227,000.
Rees said his budget does not call for any layoffs and contains a "moderate tax increase." His proposal would increase property taxes for municipal services by 2.9 percent.
Mayor Michael Brennan stated his support for the manager's budget, adding, "I think he has set a strong course for the city."
But Brennan also said uncertainty at the state level could have serious repercussions for Portland taxpayers.
Brennan said Portland stands to lose $6.1 million in municipal revenue sharing, $2.8 million in General Assistance, and $1 million from the Business Equipment Tax Reimbursement program.
There also could be a shift of about $1.3 million onto the city to pay for teacher pensions.
"Unlike last year, we are facing financial uncertainties in Augusta unlike we've seen in the last quarter century," Brennan said in his annual budget address.
Several city residents reacted to the manager's presentation.
Steven Scharf said Rees was "gambling" on state aid coming through. Scharf said the manager's budget was a "wish list" that needed to be refined further.
Kevin Casey urged the council to find ways to save money and spend less.
And Benjamin Roberts said: "This doesn't mean you have to raise property taxes. If we get less money from the state, then you have a choice. You could spend less."
Staff Writer Dennis Hoey can be contacted at 791-6365 or at: