Portland spending plan, 'modest' tax hike, assume LePage budget won't fly

  • Mail this page!
  • Delicious
  • 0

PORTLAND — City Manager Mark Rees is proposing a $216 million municipal budget for the 2014 fiscal year, an increase of $10 million, or 4.8 percent, from the current year.

But the budget doesn’t anticipate what will happen if Portland loses more than $10 million in state funds, as Gov. Paul LePage has proposed.

On Monday, Rees presented his budget to the City Council, which referred the budget to its Finance Committee for review. The presentation began a six-week process that will culminate with a council vote on the budget scheduled for May 20.

The proposed budget is “structurally balanced,” Rees said, and includes only a “modest,” 27-cent increase in the property tax rate, or 2.9 percent. No layoffs are planned.

But all that is predicated on the Legislature rejecting the proposed state budget.

If enacted as planned, LePage’s budget would cut revenue sharing with the city by $6.1 million, reduce General Assistance funds by $2.8 million, and eliminate another $1 million because of changes in the Business Equipment Tax Reimbursement program. The city also might have to pick up as much as $1.4 million in costs for teacher pensions that would be shifted to municipalities.

Mayor Michael Brennan expressed support for Rees’ proposal, but said creating a responsible budget amid so much uncertainty over state funds is like living in a “parallel universe.”

“We are facing financial uncertainty in Augusta unlike anything we’ve seen in the last quarter century. … There has never been a cost shift like this in recent history,” Brennan said.

Councilors agreed, and in a separate action passed a resolution opposing the shift, making Portland one of a growing number of municipalities that have adopted such resolutions.

In his comments, which were required by the City Charter, Brennan said the uncertainty in Augusta should not prevent Portland from making important investments. But several people attending the meeting said the city should curtail spending.

State Street resident Kevin Casey called opposition to the state cutbacks “fear-mongering,” and said the council must risk unpopularity and make cutbacks of its own.

“Everybody’s afraid to be the bad guy,” he said.

High Street resident Steven Scharf told the council the budget should be returned to Rees for further work because it is only a “wish list” and is “gambling” on the assumption the state budget will be rejected.

The council’s Finance Committee will begin reviewing the municipal budget this week. A public hearing on the budget will be held May 6, and a council workshop is scheduled for May 13.

William Hall can be reached at 781-3661 ext. 106 or whall@theforecaster.net. Follow him on Twitter: @hallwilliam4.