CUMBERLAND — Next year’s municipal budget could cause a tax increase of half a percent.
The impact of the School Administrative District 51 budget remains to be seen, although Town Manager Bill Shane on Monday suggested school spending could boost the tax hike to a combined 4 percent to 6 percent.
Shane presented his recommended fiscal 2013 municipal budget to the Town Council. The spending plan is subject to change by the time the council approves it in late March or early April.
The operating budget could rise from $7.6 million in fiscal 2012 to nearly $7.9 million next year, an increase of nearly $220,000, or 2.8 percent. Increases in fuel contingency, abatements and county taxes contribute to that additional amount.
This year’s total municipal budget – operating and capital costs included – was nearly $8 million. Municipal expenses had dropped by about $856,000 in the previous five years, down from $8.8 million in fiscal 2007. Next year’s total municipal budget would be about $8.75 million.
Revenues are expected to increase next year by nearly 2.4 percent, or about $72,000.
The net budget increase of about $550,000 would be offset by $474,000 in added town value to cause an approximately $75,000 increase to the tax rate. As a result, the municipal impact on the tax rate would be a 7-cent, or 0.5 percent, increase over the current tax rate $15.80 per $1,000 of property valuation.
The capital improvements component of the municipal budget could see a significant increase, from about $330,000 this year to about $906,000 in fiscal 2013.
While Cumberland achieved 19 percent of its goal in fiscal 2012 for improving and maintaining infrastructure such as roads and vehicles, it would reach nearly 52 percent of that goal next year.
Shane said the secession of Chebeague Island in 2007 and tough economic times since then have impacted all of Cumberland’s operations, but has left a particularly large void in capital improvement funding. He said the property tax base has stabilized, and that the town should gain about $30 million in additional value in the coming years.
Road paving is a large part of the capital improvements increase – from nearly $90,000 in the current fiscal year to about $460,000 in fiscal 2013. That budget is due the following year to increase to more than $600,000, and then ultimately to $800,000, to fund a 12-year road improvement program that Shane and other town staff have said is long overdue.
“The difficulty is, we could continue to budget flat, as we have done for the last five or six years,” Shane said, “but the problem’s going to be (that) we’re going to have an excessive pressure to bond roads and equipment, because we just haven’t kept up with funding those accounts. So we have to choose, do we want to continue bonding roads and equipment, or do we want to look at trying to incorporate that into the budget?”
A day-long budget workshop will be held at Town Hall on Saturday, March 17. It begins at 8 a.m. and is open to the public.