FREEPORT — Freeport town officials are looking at ways to lower the tax burden for residents as the financial impacts of the coronavirus pandemic continue to mount.
The current $10.5 million municipal budget, presented to the town council Tuesday, would lower taxes by .12%, but when combined with Freeport’s projected $19.7 million share of the Regional School Unit 5 budget, residents face an overall 3.87% tax increase.
This would increase the town’s tax rate to $14.90 per $1,000 valuation, according to budget materials, which would mean a $4,470 property tax bill for a home valued at $300,000.
The town’s saving grace may come in the form of a $1 million tax rate stabilization fund, established sometime in the 1980s, that allows the town to take out up to $500,000 for one year. The fund is intended to be used if the tax increase is set to go above 5%, Town Manager Peter Joseph said, but the council is allowed to change the policy with a majority vote.
Finance Director Jessica Maloy said Wednesday that to her knowledge, the fund has not been used for at least 15 years.
John Egan, Council Chair, supported a withdrawal.
“The account is there for extraordinary circumstances,” and “a worldwide virus pandemic that has shut our economy down” certainly fits the bill, he said.
The municipal budget includes a roughly $90,750 spending increase related to salaries, hydrant rentals, water quality testing, tree and vehicle work and vehicle maintenance among others.
Town officials are also projecting a decrease in revenue sharing, or sales tax money distributed by the state as property tax relief. Last year, Freeport saw a significant boost in revenue sharing, but anticipates a $100,000 decrease for 2021.
Cost-saving measures include a $150,000 reduction from the town-wide paving budget, bringing it from $400,000 down to $250,000. The use of impact fees will be raised from $80,000 to $175,000 and the town employees may also forgo a planned 2.5% cost of living adjustment.
Other savings may be forthcoming with electric costs lowered by solar usage, Maloy said, as well as reviewing service levels within the town departments in light of the pandemic.
The largest impact on the tax rate is the $857,676 increase from RSU 5, which includes Freeport, Pownal and Durham.
According to the Forecaster, the school district’s budget is largely driven by a $1.5 million increase in estimated salary and benefits. Additional staff includes a Freeport High School math teacher and Morse Street School kindergarten teacher, both for $82,000 including benefits, as well as a half-time social worker at the high school, half-time guidance counselor and half-time pre-kindergarten teacher at DurhamCommunity School, both for $41,000.
The $500,000 from the tax rate stabilization fund would come close to offsetting the school’s increase, Egan said, but it would not cover the whole amount.
Councilor Eric Horne cautioned against drawing too much from the stabilization fund too quickly.
“The crisis is hitting now but I’m wondering if the repercussions might be felt more 12 months from now,” he said, adding that he would like to “keep some of the powder dry” while the situation is still unfolding.
Councilor Sarah Tracy agreed and suggested that before tapping into the town savings, they should “go to the source” and ask the school to “shave wherever you can.”
Councilors and staff agreed to send a letter to superintendent Becky Foley asking if there are any opportunities for additional savings, especially given that school facilities have been closed since March.
Councilors also expressed interest in adding back in the cost of living increase for town employees, which Joseph said he originally removed to “be respectful to taxpayers, possibly 10% of whom are unemployed at this time.”
The town hopes to help local businesses weather the storm through a COVID-relief loan fund, which would appropriate $100,000 from the Destination Freeport Tax Increment Finance District Fund and allow for up to $50,000 of matching funds. Tax increment financing is a tool used by municipalities to capture funds in certain areas of town to help pay for future projects. A public hearing on appropriating the money for the fund is scheduled for May 19.
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