Subsidy hike for Regional School Unit 1 means tax break for Bath

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BATH — Thanks largely to Regional School Unit 1 receiving more state subsidy than expected, the city’s projected tax increase for fiscal 2016 is dropping from almost 5 percent to 2.5 percent.

A change in how the city applies the state’s Business Equipment Tax Exemption funds also contributed to the reduction.

The Bath-based school district is getting $9.3 million from the state instead of the $8.8 million originally expected. Instead of keeping the added funds in school coffers, the RSU 1 Board of Directors opted to pass it on to its two communities that receive state subsidy: Bath and Woolwich.

“The RSU board agreed to give back the $200,000 that was allocated for Bath in extra funds from the (Maine) Department of Education,” Bath City Manager Bill Giroux said Sept. 3.

As a result, Bath’s assessment to RSU 1 is dropping from $9.6 million to $9.38 million.

“The board felt … that (since) it was above and beyond what we expected to receive … it would be prudent to lower the assessments” for the two communities, RSU 1 Superintendent Patrick  Manuel said Sept. 3.

Under the Business Equipment Tax Exemption law, business equipment taxes are reimbursed, “and the city made out better in the formula this year,” Giroux added.

“Because Bath Iron Works added additional value to the yard last year in the form of property eligible for the (BETE) program, the state reimbursement to the city of Bath for that program in the current year will be significantly higher than previously anticipated,” City Assessor Brenda Cummings said in an email Tuesday. “That allowed us, in combination with the greater school subsidy, to reduce the mill rate increase to just 2.5 percent over last year.”

Giroux said “because of the RSU’s decision to release the $200,000 and the change in the BETE law, we’re able to reduce the tax increase from almost 5 percent down to 2.5 percent. And the council was overjoyed to hear that.”

Bath’s tax rate for fiscal 2015 was $20.20 per $1,000 of property valuation, Giroux said. That figure was expected to increase to $21.20 for fiscal 2016, but will now be $20.70.

Alex Lear can be reached at 781-3661 ext. 113 or Follow him on Twitter: @learics.

A Maine native and Colby College graduate, Alex has been covering coastal communities since 2001, and currently handles Bath, Topsham, Cumberland, and North Yarmouth. He and his wife, Lauren, live in the Portland area, and Alex recently released his third album of original music.