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South Portland councilors warn of tax increases under proposed state budget

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South Portland councilors warn of tax increases under proposed state budget

SOUTH PORTLAND — City councilors said yes Monday to a federal Homeland Security grant, a share of asset forfeiture related to a drug investigation, and the goals they set during a workshop in December.

But in non-binding resolution, they unanimously rejected the state budget proposed by Gov. Paul LePage.

"There are so many angles where balancing the budget just seems wrong," Councilor Patti Smith said. "It will choke so many communities in terms of their abilities to be vital and attractive for growth."

LePage's budget, submitted last month and awaiting debate by the state Legislature, would postpone sharing state tax revenues with municipalities for the next two years, reduce the municipal share of excise taxes on commercial tractor trailers, and, in the second year of the two-year budget covering fiscal years 2014 and 2015, eliminate state reimbursements for local business equipment property taxes.

As estimated by city Finance Director Greg L'Heureux, those proposed measures could cost the city $2 million in the next fiscal year. Changes in the manner business property taxes are assessed and reimbursed could lead to a $762,000 revenue loss on top of $2 million in revenue sharing and excise tax revenue reductions in fiscal year 2015.

Combined, the projected revenue reductions for fiscal year 2014 could add 66 cents to the city property tax rate, now at $16.50 per $1,000 of assessed value. L'Heureux said a property valued at the median level of $195,000 faces a $162 tax increase based on the need to replace lost state revenues.

While objecting to revenue reductions Mayor Tom Blake said would lead to "laying off multiple dozens of people and cutting services" unless property taxes were increased, the council resolution also took aim at state budget proposals to eliminate the Homestead Exemption and limit eligibility for the "circuit breaker" program providing property tax reimbursements to low- and moderate-income households.

L'Heureux estimated eliminating the $10,000 paid by the state for the Homestead Exemption and limiting circuit breaker eligibility to homeowners 65 and older would add $165 annually to taxes on city homes valued at the median $195,000.

Councilor Linda Cohen joined Smith in urging residents to become more aware of the impending financial difficulties caused by the proposed budget and added it is especially distressing for younger residents already struggling to pay off college loans.

“There will be tax increases, and it won't be because the City Council passed them,” Cohen said.

Federal grant

Councilors accepted a $107,000 federal Homeland Security Grant passed on by the Maine Emergency Management Agency. The grant has been reduced since reaching a $328,000 high in 2010. The money funds training programs for hazardous materials spill responses and incident management, and pays for communications and tactical equipment.

The city was also awarded more than $33,000 in forfeited assets stemming from an ongoing U.S. Department of Justice drug investigation. Police Chief Ed Googins said the money must be used for law enforcement purposes. Prior asset rewards have paid for two vehicles, weapons and staff training.

Councilors also tabled an order that would ban parking from May 1 to Sept. 1 on the north side of New York Avenue near Wilkinson Park from the street's dead end to Boston Street, and on the east side of Concord Street.

The proposed ban is an attempt to relieve congestion and overflow parking for Little League games at Wilkinson Park, but Blake said he wants more input form neighbors before a council vote.

Wile Councilor Jerry Jalbert said some of the congestion may be caused by families using multiple vehicles to attend games, councilors also wondered if vehicles diverted from parking on New York and Concord avenues would end up clogging other neighborhood streets and making it difficult for emergency vehicles to get through.

A proposed parking ban will likely be discussed again at a workshop next month before being placed on an April council agenda. If approved, the ban could be enacted immediately, before the beginning of the baseball season.

David Harry can be reached at 781-3661 ext. 110 or dharry@theforecaster.net. Follow him on Twitter: @DavidHarry8.