BIDDEFORD — City Manager James Bennettt’s proposed budget for the coming fiscal year, presented to Biddeford City Council last week, includes both a municipal spending and tax rate increase, as well as an additional $405,000 for addressing Biddeford’s homeless crisis.

If passed as outlined, the city will see a municipal spending increase of $3.5 million or 9.18%, for a total of $44.9 million for FY2025, which begins on July 1. Under his proposal, the tax rate would increase to $13.90, a jump of $0.78, and it could be higher as this initial number does not include the school budget’s impact on the tax rate. 

The school budget is a separate process and that budget proposal will be presented on March 19. Residents will vote to approve or reject the school department budget on June 14.

“If the (municipal) budget is approved as proposed, residents could expect see increases in their tax bills this year,” said Assistant City Manager Danica Lamontagne in an email.

Bennettt’s proposal outlines less spending than what department heads requested, which was $46.4 million, or a 10.23% increase from the year prior.

In addition to these topline numbers, Bennettt proposed devoting $405,000 towards dealing with the city’s unhoused population, which he called “the most difficult issue facing local officials anywhere.” 

That proposed spending – of which only $305,000 would have a tax impact –  would support relocating the city’s unhoused encampment in Mechanics Park to a different location, and adding two staff positions. Bennettt also proposed using Community Block Development Grant money for a new transitional housing pilot program.

Bennettt’s budget proposal is just the opening salvo in the budgeting process. The city will hold a series of public hearings, the first of which is March 26, and Budget Committee meetings to discuss Bennettt’s proposal. The City Council will vote on a final version of the budget in May.

Inflation and a decrease in revenue sharing from the state are putting a strain on the budget this year, according to Bennettt,  which are part of the reason for proposed budget increase. 

“We’ve done a pretty good job over the last couple years of squeezing our expense lines in hopes that inflation would slow down … the truth is (that) hasn’t really been the greatest strategy,” he said.

Inflation surged following the pandemic, and while it has cooled since its peak in June 2022, average prices are still higher than what they were three years ago. Bennett reminded listeners that municipalities, like resident, are vulnerable to price increases.

Because of inflation and other factors leading to increased spending, the property tax rate will likely go up, which will probably result in higher tax bills for many if not most property owners.

Not that a lower tax rate always lead to a lower tax bill, for instance  — in FY2024, the tax rate was $13.12, and the year prior  it was $16.41 —but most saw an increase in their tax bills.

The tax rate is calculated by taking the amount of money that the city is looking to collect through the tax process and dividing it by the total amount of property value in the city, so when values go up, the rate goes down, Lamontagne said.

And property values in the city have gone up.

“The reason that the tax rate appeared on the surface to go down so significantly (between FY 2023 and 2024) is because our Assessor’s Office did a revaluation of all of the property values in the city, and those numbers went up significantly,” explained Lamontagne. When a property’s value increases, even if the tax rate is low the tax bill rise.

Also causing a likely rise in property tax bills is that while Bennettt’s budget calls for an increase in spending, the city is looking at a decrease in revenue from the state this year. In past years, Biddeford has received both “Revenue Sharing I” and “Revenue Sharing II” through the state’s revenue sharing scheme. It will not receive any Revenue Sharing II sharing this year. 

Revenue sharing is essentially a program where a portion of state revenues collected from corporate income, sales and personal taxes are funneled back to municipalities.

“The way that the revenue sharing works is: 80% of the money that the state sets aside goes back to every community, that’s ‘Revenue Sharing I,’” according to Bennettt. The rest of the money set aside goes towards communities with higher property tax burdens, and that’s Revenue Sharing II.

This fiscal year, Biddeford isn’t eligible for Revenue Sharing II, said Bennettt. In part because the city’s valuation has jumped — since FY2016, Biddeford’s state valuation has increased 95% (or roughly $2 billion) — but the city’s rate of spending hasn’t increased as fast, Biddeford can expect a decrease in revenue sharing of $775,000, or 18.9%, per Bennettt’s proposal.

To keep the budget balanced, Bennett proposed that the city keep capital funds the same as FY2024 ($2.6 million) and only add two new positions, who will be people that deal directly with the unhoused.

On the homeless front, the city is constrained by a 2018 ruling by the 9th Circuit Court of Appeals, Martin v. Boise, which mandated that municipalities can not criminalize public camping in the absence of a meaningful alternative. Biddeford does not have a shelter and therefore is not allowed to remove the homeless encampment that currently exists in Mechanics Park.

In order to confront rising levels of the unhoused in the city, Bennettt is proposing that the city add a coordinator position (estimated to cost $125,000) that is solely tasked with homelessness response and liaising with partners on this issue. He also proposes funding a new social worker for the city (estimated to cost $105,000), or a “second Jake.” Jacob Hammer is the police department’s community engagement specialist.

Bennettt also wants to give $75,000 to the neighborhood group Seeds of Hope in order to keep their warming center open next year, and is in favor of using Community Development Block Grant money in order to fund a transitional housing pilot program, as outlined by Seeds of Hope Executive Director Vassie Fowler at a Feb. 13 City Council meeting.

Bennettt said in a phone interview that he is in favor of making access to the pilot program or staying in the designated encampment contingent on certain requirements, similar to the way some homeless shelters impose entry requirements.

In terms of what those conditions might be, Bennettt said “we’re trying (to have) the unhoused team up with the appropriate partners, community partners to … to deal with some of the underlying issues that contribute to them being homeless. Most people being homeless – it’s caused by other issues.”

All told, these proposals would cost $405,000, though Bennett proposes using some $100,000 of the money from opioid settlement payments in order to bring the total down to $305,000.

Bennettt said he did not include the $405,000 in his topline budget numbers because he wanted to wait until he heard the council’s feedback on his proposal.

Copy the Story Link

Comments are not available on this story.

« Previous

BHS students celebrate cultural diversity at 2nd Annual Multicultural Fair

Next »

Obituary: Armand “Joe” Janelle, 6/16/1938 – 3/12/2024