State budget could mean tax cuts in Scarborough, Cape Elizabeth
SCARBOROUGH — Town managers here and in Cape Elizabeth are expecting very little impact on their budgets in the wake of the state budget adoption.
If anything, both towns could see a slight reduction in property taxes.
The $6.3 billion state biennial budget was adopted June 26, and its details provided good and bad news for both towns.
During budget talks, Gov. Paul LePage threatened to eliminate state revenue sharing, the homestead exemption program and retirement funding for teachers. As a result, both towns adopted budgets earlier this year that were essentially bets on the eventual outcome in Augusta.
Some of those bets paid off. Some did not.
In the end, it was a wash.
During a Town Council meeting on Monday, Town Manager Michael McGovern said the net effect of the state budget adoption will be an estimated 12-cent reduction in the mil rate from $16.40 to $16.28 per thousand of valuation.
The median home value in Cape Elizabeth is $314,000. A 12-cent reduction in the mil rate translates to a modest savings of $38 per year for a median-value home.
The new biennial budget had "its ups and downs for Cape Elizabeth," McGovern said.
The state school subsidy for Cape Elizabeth was $427,000 more than what the School Department estimated, but the schools are also taking a $299,000 hit in state retirement funding for teachers.
State revenue sharing came in at $451,000, or $188,000 less than the town budgeted.
The homestead exemption funding for Cape Elizabeth is $196,000, or $46,000 more than budgeted.
The tax impact of the state budget hasn't been tabulated yet, but it will probably result in a mil rate decrease of a "penny or two," Town Manager Tom Hall said.
In total, the town is facing a reduction in state revenue sharing of $326,000; however, the town is anticipating an increase in excise taxes from increased auto sales due to a strengthening economy.
"Essentially, there's no effect," Hall said.
The School Department is facing $520,000 in teacher retirement benefits, but the state subsidy for education is $788,000 more than expected.
"Taken all together – changes on the town side and the school side – we come out about $300,000 on the good, meaning tax relief," Hall said.
A budget amendment to take into account the revenue changes will be discussed July 17 at the next Town Council meeting.