The Portland City Council approved a 3 percent property tax increase Monday but not before several speakers warned that tax rates were becoming increasingly burdensome for some city residents.

The budget approved Monday night by a 7-2 vote and a $101.6 million schools budget endorsed by voters last week both increase spending by 2.7 percent. When combined, the two budgets will raise the city’s property tax rate from $19.41 per $1,000 of assessed value to $20 – or 3 percent – for the fiscal year that begins July 1.

That translates into a $134 annual increase for an average-priced home of $227,000, whose owners will pay a total of $4,540 a year in property taxes next fiscal year.

City Manager Mark Rees said the budget provides funding to add both a park ranger and a code enforcement officer in response to public concerns about nuisances in city parks and downtown. It also continues to finance upgrades to Portland’s sewer and wastewater infrastructure while exploring methods to improve public transportation and enhance access to affordable housing in the city.

The city budget includes funding for the equivalent of roughly 15 additional full-time positions after accounting for positions that were fully funded through grants or reimbursements.

“This is the first year in many years that we haven’t been forced to go through layoffs either on the city side or on the school department side,” Councilor David Marshall said. “So after years of shedding positions through a very painful process, it is nice to have a year when we are not going through that.”

Several council members, as well as residents, raised concerns about the rising taxes, however.

Mark Hall of Peaks Island praised the city for the scope and quality of the services it offers but warned that residents “are getting taxed out of the city.” The city needs to explore ways to reduce costs, he said.

“We are not running this like a business,” Hall told the council. “We are not looking at this from the taxpayers’ point of view.”

Portland expects to receive an additional $1.7 million in property tax revenue next fiscal year because of an $87 million jump in assessed property value, largely a result of three major downtown hotel projects.

But those revenues were more than offset by rising costs elsewhere, such as for education, social services and debt payments. Also, the city will lose $325,000 in revenue sharing from the state as a result of cuts passed by the LePage administration and the Legislature.

Councilor Jon Hinck, who cast one of the two dissenting votes, said that while Portland is not the highest-taxed municipality in Maine, the city is near the top. He also noted the current budget passes a new threshold by hitting a tax rate of $20 per $1,000 of assessed value.

“I don’t think we should go there, and what that requires is going back through the budget to find every little place where we can tighten things up,” Hinck said.

Councilor Cheryl Leeman, who also voted against the budget, said many people are already struggling to meet the rising costs of everyday life, and the city tax hike will only increase that burden.

“We are not going to be able to sustain this type of budget into the future just based on our own demographics,” Leeman said. “Our population is aging … and a lot of the younger people who we would like to keep here are moving out of the city just because they cannot afford to pay the high property taxes.”

Councilor Nicholas Mavodones, who chairs the council’s Finance Committee, which drafted the budget, acknowledged that the council faces a difficult balance of meeting residents’ expectations while maintaining an affordable tax rate. Faced with rising costs and shrinking state aid, the council should soon begin a discussion with the community about what city services and programs can be cut next year, if the public wants to keep next year’s taxes lower, Mavodones said.

In addition to raising property taxes by 3 percent, the budget also increases a number of fines and fees levied by the city.

For instance, the city’s building permit fee will increase from 1 percent to 1.1 percent of project costs while lowering the minimum fee from $30 to $25. The result will be projects costing less than $6,000 would pay less money in fees while those costing in excess of $6,000 will pay more. Fines for many parking violations will also increase from $25 to $30.

Kevin Miller can be contacted at 791-6312 or at:

[email protected]

Twitter: KevinMillerPPH

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