SOUTH PORTLAND — Residents could see a 3.66 percent increase in the property tax rate to cover a roughly $2.85 million general fund budget increase for fiscal year 2013.
Those numbers are based on a municipal budget presented by City Manager Jim Gailey to city councilors last week, as well as a proposed 2.2 percent budget increase in the operating budget for the School Department.
Assuming the budgets proposed by the city manager and the school superintendent are accepted, the total general fund budget would weigh in at about $72.1 million. Last year’s adopted budget was nearly $69.3 million.
The property tax rate would be $16.69 for every $1,000 of assessed property value, an increase of 59 cents over last year’s rate – 50 cents to the School Department and 9 cents to municipal operations.
For the average South Portland homeowner, whose home is assessed at $195,000, that makes for an annual tax bill of more than $3,200 – an increase of about $155 over last year’s bill.
The General Fund, which covers municipal operations, the schools and county taxes, is by far the largest segment of the city’s total budget. Including other funds supported by fees and other non-tax revenue, the total city budget could top $86.2 million.
The bulk of the $2.85 million general fund increase comes from hikes in school spending and payments on the voter-approved high school renovation projects, with the latter representing about $1.98 million in debt repayment and annual reserves meant to mitigate future effects of the renovation on taxpayers.
According to Gailey’s budget outline, there was a 3.56 percent budget increase from the start, largely fueled by fixed costs increases on salaries, retirement contributions, health insurance and fuel costs. The budget includes 1.5 percent cost-of-living raises for most union employees and 1 percent raises for nonunion employees.
Gailey asked the heads of each city department to present a budget with no more than a 1.5 percent increase.
“I felt a 1.5 increase was the starting point the departments should be working from and by no means was it an easy task,” he said. “In all departments, the increase was consumed by salary and hourly expenditures.”
In addition to fixed-cost budget increases, the city also projects a decline in investment interest revenue of about 17 percent, or $100,000.
Still, efficiencies were found or line items cut in several municipal department budget areas: Public Works spending is down about $148,000 (3.4 percent); Culture and Recreation spending is down $9,500 (0.31 percent); Health and Welfare spending is down more than $51,600 (12.4 percent); and contingency and reserve accounts are down $62,000 (29.7 percent).
“Even having the ability to increase the budget, very difficult decisions had to be made by the administration throughout the budget process,” Gailey said. “Past year’s reductions and eliminations have had an impact on the organization.”
The biggest increase in the municipal general fund, by function area, is public safety. Police, Fire and EMS spending is slated for an increase of almost $432,000, or 4.6 percent.
Because the School Board and City Council are both still working on their budgets, the numbers presented so far are subject to change. This week, city councilors met with department heads to go over the budget in more detail.
Residents can ask questions and address the City Council and School Board during a budget hearing at 7 p.m. Wednesday, April 4, at City Hall.