'Day of reckoning': Scarborough faces nearly 11% tax hike

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SCARBOROUGH — Economic reality and a desire to maintain education quality means property owners could see their taxes rise 10.8 percent under the next town budget.

“The day of reckoning has come,” Town Manager Tom Hall told the Town Council on Wednesday. “You knew this day was coming, and here it is.”

For the past several years, federal stimulus money and available savings have helped the town escape the brunt of the 2008 recession and its lingering hangover.

But with the temporary revenue streams now running dry, Hall said, fiscal year 2013 will be a “correction year,” where the town – and taxpayers – must come to terms with the changed fiscal climate.

Hall’s budget proposal of $69 million for fiscal 2013 includes a 1.69 percent increase in municipal spending, a 5 percent increase in county spending and a 9.86 percent increase in education spending.

Those upticks are offset by a 3.62 percent decrease in total town debt service, which Hall called a coup.

“We’ve been able to restructure and reorganize our debt in some significant ways and were able to realize savings as soon as the coming fiscal year,” he said. 

The budget proposal will go through several Finance Committee and Town Council workshops before it is ultimately approved by councilors. The School Department’s portion of the spending – about $39 million – will also have to be approved by voters in a May 15 referendum.

But if the budget were passed as proposed by Hall and his staff, the estimated effect on taxpayers would be an increase of $1.41, or 10.8 percent, on the property tax rate. That means $14.44 for every $1,000 of property valuation, compared with this year’s rate of $13.03.

Under that scenario, the the owner of a home valued at $300,000 will pay $432 more in taxes next fiscal year.

Revenues are down across the board, Hall said. Non-tax municipal revenue is down about $469,000, or 4.3 percent. Non-tax education revenue is down $1.18 million, or 18.23 percent.

“While we have increased expenses, we’re also seeing decreased revenue,” Hall said. “That means a larger share needs to be picked up locally, or we need to re-examine where our priorities are.”

Hall’s budget also includes capital improvement projects and equipment spending of about $2.6 million for a new boiler at Town Hall, a bath house at Higgins Beach, improvements to the Dunstan Corner intersection and general road rehabilitation.

Some of that spending would come from revenue sources other than the general fund, and wouldn’t affect the tax rate.

While many municipal service areas, such as public works and public service, were able to reduce spending or nearly flat-fund their budgets, the school district is pushing a budget with a nearly 10 percent increase in spending. 

That’s $3.5 million more in spending than this year.

‘Sense of urgency’

“We are, with a sense of urgency, moving to stop further deterioration of education quality at Scarborough schools,” Superintendent George Entwistle III said during his budget proposal to the School Board on March 15.

Between fiscal 2010 and fiscal 2012, Entwistle said, the schools have cut 42 full-time equivalent jobs. School spending was essentially flat in the same time period. In fiscal 2011, school spending actually decreased, he said.

“You can’t make that kind of a reduction and expect no impact,” Entwistle said.

The big jump in spending is meant to turn back the “pattern of underfunding,” Entwistle said. It would reinvest in educational assets built before all the cuts – such as the foreign language program – while accelerating the focus on a science, technology, engineering and math curriculum.

While the increase is substantial, less than one third of new spending will go directly to new or reinvested student programming. About $1.1 million is debt service on the new Wentworth Intermediate School and another $1.1 million is contractually obligated labor spending. 

(On Wednesday, Hall noted that debt restructuring will mean the Wentworth bond won’t affect the tax rate, but that hadn’t been factored into the superintendent’s budget proposal.)

Knowing this, the School Board said Entwistle’s budget proposal is a reasonable effort to stop the bleeding. 

“A large part of this is debt service, reconciliation,” board member Aymie Hardesty said. “As you go through the numbers, we have to keep in mind that only a small number is for increasing education for the children.”

The School Board is expected to pass its final budget on April 24. The next day, the Town Council and School Board will meet for a final budget workshop before the council’s final reading on the complete budget on May 2.

Mario Moretto can be reached at 781-3661 ext. 106 or mmoretto@theforecaster.net. Follow him on Twitter: @riocarmine.