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Portland City Council OKs budget, 3% tax hike

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Portland City Council OKs budget, 3% tax hike

PORTLAND — Budget season concluded Monday night with city property taxes increasing 3 percent to a plateau some councilors and speakers called worrisome.

By a 7-2 vote, with Councilors Jon Hinck and Cheryl Leeman opposed, the City Council adopted a $221 million fiscal year 2015 budget that, when combined with the education budget, will boost the property tax rate 59 cents, to $20 per $1,000 of assessed value.

The $101.6 million school budget was approved by voters May 14, by a 1,033 to 459 vote.

The combined demand on property owners is more than $153 million, with a near-even split between municipal and school operating costs.

Before the vote on the appropriation resolve, councilors unanimously approved detailed spending orders to provide 1 percent pay increases to nonunion municipal employees on July 31 and Jan. 1, 2015, increase building and other permit fees, and increase sewer rates by 5.5 percent.

Hinck, who also voted against the school budget May 5 before it was forwarded to the referendum vote by councilors, said his opposition was not because the budget was irresponsible in anything – except its final cost to taxpayers.

“I can't say, as I stand here, the reason I vote no is because I see in this budget wanton waste, fraud or abuse of fiscal trust,” Hinck said. "There is a tension between the outlays and sources of revenue that will always be there.”

The 3.5 percent tax increase on the municipal side had been whittled down from 3.8 percent by the Finance Committee, headed by Councilor Nick Mavodones. The committee added more expected revenues from the International Marine Terminal, penalties on late payments to the city, and $110,000 more from fund balance.

But the entire 3 percent increase on the city tax rate was too much for Leeman to accept.

"People are just being overburdened with increased costs, and then you add to that the ongoing annual increase in property tax," she said.

Supporters of the budget, including Councilor Ed Suslovic and Mayor Michael Brennan, noted the additional financial strain and sounded warnings about rising costs for next year.

Suslovic said overtime costs at the Fire Department must be reined in next year, while conceding the council may becoming "complacent" about increases in municipal spending.

"We've got a situation that is crushing us," Suslovic said about the overtime costs.

Brennan said the municipal share of the tax rate, now at $9.89 per $1,000 of assessed value, is also a direct result of cuts to state revenue sharing in the last two years.

“I don't have something new and I don't have something different to say, but it is still compelling. Our governor and our Legislature gave us this budget,” Brennan said.

Residents opposed to the budget said city leaders need to look more at outsourcing services, such as plowing or trash removal, as property tax bills reach $500 per month on a property valued at $300,000.

Beverly Street resident Paul Connolly said he could see need for some social welfare spending, but expressed concern it is also drawing people to the city who are not becoming part of the tax base.

“My taxes go up and up," Connolly said. "From the infrastructure perspective, it is hard to see a lot of the improvements.”

Peaks Island resident Mark Hall effusively praised work by the Public Services Department and the work by councilors in creating the budget, but said something is still missing from the outlook.

“I feel we are starting to miss the picture that we are getting taxed out of the city. A mortgage and a tax bill should not be two grand,” Hall said. " We need to look at it as a business, not an endless supply of money.”

Mavodones said the budget reflects hard choices made by officials and councilors, while still maintaining a level of services desired by residents. Should the demand be there to cut back, he said, it should be discussed in advance and in detail.

“This is a year when we felt as a committee it was important to find some balance with some of the positions," Mavodones said. "If this council, and not just the finance committee, thinks that is the direction the city should be taking, we need to talk about it early this fiscal year and march down that path."

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