Not too late to weigh in on budget process
IN THE CITY
by Jim Bennett
On Monday evening, April 29, the Presque Isle City Council will hold a workshop to begin a very difficult discussion on how to handle the impacts of the proposed state budget.
The proposed state budget (beginning July 1), as drafted, will eliminate nearly $400 million of funds that have traditionally been used to reduce property taxes across the state. Locally, if adopted, it would eliminate $1,890,585 of funds from sources our city has been receiving for years. For clarity, Presque Isle’s total adopted budget for 2013 is $10,863,302 which equates to a mill rate of 23.5. Without those state funds to reduce the property tax rate, our tax rate would have to go up by nearly $4 (if the same level of services were expected) which equates to a mill rate of 27.5.
The 2013 budget for the city is already adopted. Our budget is based on the calendar year. The budget adopted by your city leaders would not raise property taxes this year (on the municipal part of the property tax rate). This is only true, if the legislature rejects the parts of the proposed state budget that would fund the state spending, at an increased level (up by $123 million over the last budget),by reducing the money towns and cities use to reduce property taxes.
Three months ago, upon the public revealing of the proposed state budget, nearly universal dissatisfaction has been expressed regarding the impacts on local communities and property taxes. Optimistic expectations arose that those expressions of dissatisfaction would translate into decisive action. To date, it has not happened.
Difficult decisions will need to occur within the state capital building. As this article is being written, there have not been any public decisions made on the state budget. Local communities throughout the state are left to speculate on how to best handle the unknown impacts. Our local contingency planning will begin at the April 29th meeting without any sense of resolution.
At this initial planning, the City Council will attempt to reduce the existing 2013 budget by another $200,000 to $300,000. We arrived at this amount, based on LD 713, which would return revenue sharing to 60 percent of the amount the law requires. If the proposed state budget stays intact, future workshops will be focusing on upwards of $1,000,000 of reductions.
Over the next few weeks, I am sure you will hear about possible service reductions, tax increases or a combination of the same. It will be very frustrating for all involved. No one wants to have these discussions. Our budget is set. The City Council has worked hard to provide essentially the same services over the last few years without raising taxes. The adopted 2013 budget accomplished that for the fourth year in row. Unfortunately, the increased spending at the state level, including the new income tax reductions that need to be funded this year, have produced a state budget that is requiring virtually all of the revenue that traditionally has come from the state to support your hometown services to be eliminated.
There is still the potential that the state budget will be resolved without causing this hardship on local communities and you. Each member of the legislature must vote on the budget. It will require two thirds of the members of both the Senate and House of Representatives to vote positively. If you believe that using these funds to balance the state budget issues is the wrong approach, I would strongly encourage you to call the state representatives in our area.
Whether you live in Presque Isle or not, make the call. Every community is struggling with the same challenges. Do not underestimate the impact you can have. By making the call, you may very well make sure that your local services will not be reduced, or that your property taxes will not be increased.
Meanwhile, back at City Hall, we will be working on contingency plans and hoping that there is no need to implement any of them.
Jim Bennett is Presque Isle’s city manager. He can be reached at 760-2785 or via e-mail jbennett@presqueisleme.us.
