SOUTH PORTLAND — The South Portland City Council approved the 2022 fiscal year budget of $115 million on June 22 and there may be some changes to the mil rate due to property revaluation and state funding.
Councilors approved the resolve for the fiscal year 2022 budget, with the understanding that the mil rate could drop a few dollars, a figure that the city does not currently have, said City Manager Scott Morelli.
The fiscal year 2021 mil rate in South Portland is $19.75 per $1,000 of assessed value, Morelli said.
“The impact of this year’s municipal budget would actually reduce that tax rate by $0.03 based on the revised budget that council approved,” he said. “The school budget would increase at $0.17 and the county assessment would increase it another $0.01. The net effect of that would result in at $19.90 tax rate for fiscal year 2022, which is just under 1 percent overall increase.”
However, state funding will impact this, as well as the city-wide property revaluation South Portland is undertaking this year, and could potentially drop the mil rate by a couple of dollars, Morelli said.
“Now, we know based on the Appropriations Committee of the legislature this week, they voted to increase the subsidy the state provides for education as well as state revenue sharing,” Morelli said. “And so we know that at least with the added state aid to education, we won’t need to see that $0.17 increase if the full legislature approves that Appropriations Committee vote, which won’t happen until the end of this month, early July. If that is the case, then you’re going to see a tax rate that goes from 19.75 to 19.73, which is a one-tenth of a percent decrease.”
He added, “The tax rate will go down as result of the revaluation, likely by a couple of dollars. The budget as proposed tonight would add about 15 cents to whatever that reduced mil rate will be. If the governor’s budget is adopted, the budget would subtract about $0.02 to whatever that reduced rate will be, and if we get more revenue sharing, it could even be reduced further than that.”
Due to the revaluation, the numbers for the mil rate will change, but the city does not have that figure yet, he said.
“Because property values are increasing, the mil rate will decrease,” Morelli said. “We just don’t know the final number yet.”
Morelli said the greatest amount of this year’s budget is the general fund, consuming $96 million of the total $115 million.
“That general fund is broken down into the three categories: the municipal side, which is a $38.9 million budget, which is up 1.7 percent over last year; the county assessment, which is just over $3.1 million, is up 1.2 percent; and the education assessment, coming in just under $54 million, is up slightly at 0.7 percent,” he said.
On June 8, South Portland voters approved the school department’s proposed $54 million school budget.
The fiscal year 2022 sewer user fund is estimated at $6.5 million, up 2.6 percent from last year, Morelli said. The enterprise and TIF funds total $6.8 million, a 5.5 percent decrease, and grant funds are up by 66.9 percent at almost $6 million.
Of the grant funding, Morelli said, “Again, a fluctuation there is not abnormal, and you can expect that, with all the federal dollars flowing in, that’s not a surprise that that’s increasing.”
The city council has expressed a desire to add a new planner position and new hours for the outreach librarian if the city is to receive more general funding, Morelli said. The tentative resolution to the budget if funding is received will take place in a July council meeting.
Councilors spoke in favor of the budget in general, thanking city staff for the effort.
The city did a “fantastic” job under the circumstances, said councilor April Caricchio.
“I think the public has been jarred and can hopefully stay calm until we get the figure for the mil rate,” she said.
Councilor Katelyn Bruzgo said she supports the budget and hopes to see the planner position filled as well as the outreach librarian hours improved.
“The tax rate’s going down,” she said. “I feel like that’s the best possible scenario while also having a lot of the things we wanted to do and fund on the budget.”
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