BRUNSWICK — The Town Council has received a budget proposal from Town Manager Gary Brown that would increase the tax rate by 6.21 percent, and take a million dollars from the town’s general fund.
“That is the largest increase in a budget that has been presented to the council in quite some time,” Brown told the council during a short overview of the $54.8 million budget on Monday.
Brown said the increase is largely driven by a loss of state revenues.
“I think it’s been well documented that the School Department budget has suffered a significant loss of state revenues,” he said. “On a smaller scale, we’re also anticipating a reduction in state revenues through the state revenue sharing program.”
Brown said that the municipal loss of state revenues would amount to roughly $100,000.
The property tax rate under the new budget would be $25.15 per $1,000 of assessed value; a homeowner with a property valued at $150,000 would pay an additional $222 a year under the proposed fiscal 2013 budget.
Under the proposal, $1 million would be drawn from the town’s fund balance. Without that money, the tax increase would have been 9.4 percent.
John Eldridge, Brunswick’s finance director, said on Tuesday that the total fund balance was approximately $8.5 million one year ago, and that it would increase by an amount that could not yet be accurately determined.
He said that a very rough estimation of the increase would put it in the same ballpark as the $1 million withdrawal. The balance was boosted in part by a $350,000 savings created when the state agreed to take over the funding of repaving at Cooks Corner.
The town’s fund balance policy targets two months of revenues for the fund, which would be approximately $8.9 million, Eldridge said.
The only new municipal program under the budget is a $50,000 allocation to operate a visitor’s center and perform maintenance of the train platform for the Amtrak Downeaster, per an agreement with the Maine Department of Transportation.
Brown said the $50,000 represents a “best educated guess” for the new expense.
Retirement costs have also increased in the new budget, he said.
“Like many organizations, the downturn in the market has had an effect on the state retirement system, and that has been manifested in increases in the employer rates,” he said.
Health-insurance costs are also expected to go up, Brown said, because of a high number of claims from municipal employees.
“We received a recent report from our health trust today,” he said. “… They’ve paid out 117 percent of what we’ve paid in. … We’ve been a loss leader.”
During the upcoming fiscal year, a turning lane will be added on Stanwood Street in anticipation of the new police station, and raised crosswalks will be added to Maine Street. Brown said that these projects could not have been sacrificed to offset the tax increase, because they were paid for by highway block grants and downtown improvement bonds.
Brown asked council0rs for feedback on the size of the budget increase.
“It would be helpful if you could give some indication of where you would like to see the budget land,” he said. “What is the acceptable percentage increase for this year’s tax rate?”
Chairwoman Joanne King and other councilors said that they would like to digest the information before answering.
“I probably wouldn’t be prepared to do that tonight,” she said. “I would like to review these documents first.”
The council agreed to give Brown feedback and direction at the next regular meeting on Monday, May 7.
On May 17, there will be a public hearing to discuss the budget.