BRUNSWICK — Property owners could face a nearly 17 percent tax hike if budget cuts proposed by Gov. Paul LePage are approved by the state Legislature.
But for now, the town is moving forward as if that won’t happen.
That was the message from Town Manager Gary Brown Monday night when he presented a $58.3 million combined town, county and school budget to the Town Council.
“I expect there is going to be an awful lot of work facing the council and School Committee over the course of the next five weeks to get this budget to a point where probably nobody likes it,” Brown said. “But people will accept that that’s what will have to be adopted.”
In Brown’s recommended budget for fiscal year 2014 – ignoring the implications of the LePage proposal – property owners would face a nearly 12 percent tax increase, or an additional $3.7 million to the town’s property tax commitment.
That’s more than double the tax rate increase property owners felt when the current budget was adopted last year.
Under the proposed tax hike, the property tax rate would be $27.88 per $1,000 of assessed value, up from $24.90 this year. The owner of a home valued at $270,000 would pay more than $7,500 in annual property taxes.
Brown said if LePage’s budget proposal passes largely unscathed, the town will face an additional loss of $1.5 million in state revenue and have to increase the tax rate to nearly 17 percent, make a severe reduction in programs and services, or do a combination of the two to mitigate the impact.
The largest increase in the combined budget can be attributed to the $35.7 million school budget approved by the School Board two weeks ago. The school budget calls for increased expenditures of $2.23 million, or 6.6 percent, and accounts for 10.32 percent of the proposed tax hike.
The school budget increase is largely attributable to salaries, benefits, special education and technology expenditures. The budget predicts a loss of nearly $200,000 in revenue from 18 local students who may attend the Harpswell Coastal Academy charter school, which is expected to open this fall.
The school budget also accounts for a LePage budget proposal that would shift half of state teacher retirement costs, or more than $264,000 to the town. The Legislature’s Education Committee rejected that proposal in 9-4 vote Monday.
The Town Council and School Board were scheduled to hold their first joint workshop on the school budget Thursday night. The town will vote on the school budget June 11.
Brown said an increase in health insurance and energy costs, and the cost of the new police station that is scheduled to open in October, are the largest items in the town budget increase. The operating costs of the new police station will amount to nearly $70,000 in fiscal 2014.
Brown said the recommended combined budget currently includes no reduction of programs and services, and it only adds the hiring of a deputy director of public works, a position that was cut three years ago.
Under the town’s Capital Improvement Plan, the town will appropriate $50,000 from its General Fund Balance for design work of the McLellan Building on Pleasant Street, which the town will begin using as its municipal building and meeting room in September 2014.
The town will spend an additional $270,000 from its General Fund Balance for telecommunications upgrades at the Police Department, storm sewer planning and work on the Water Street boat landing.
The town’s Capital Improvement Plan also appropriates more than $1.5 million from municipal revenue for street resurfacing and restructuring; the replacement of fire, police and parks and recreation vehicles, and the replacement of public works equipment.
“The next few years are expected to be challenging for the town as we continue to deal with the growth of expenditures that are not matched by similar growth in revenues,” Brown said in a memo to the council. “Brunswick is not unique in this regard.”
The council will hold a public hearing for the town budget and Capital Improvement Plan at its May 6 meeting.