HOULTON – Property taxes for 2001 could jump by 1.75 mils, based on a proposed budget of $7.1 million.

The increase of $1.75 per $1,000 of property valuation would push the town’s tax rate to 27 mills. For a home valued at $50,000, that represents an increase of $87.50 over the current tax bill of $1,262.50.

But the projected increase is not final. It could be more.

If Mid-Maine Medical Center in Lewiston is successful in its court challenge to have hospital property listed as tax exempt, Houlton Regional Hospital is expected to make a similar request of Houlton.

The hospital has a taxable valuation of $3 million. The loss of that property on the town’s tax rolls could add another half mil – 50 cents per $1,000 – to the tax rate.

In addition, town officials don’t yet know what the SAD 29 budget will be. That budget is not approved until the district’s annual meeting in June.

Any increase over the current district estimate of $1.85 million would also add to the tax rate.

The fact that taxes are going up was not lost Tuesday night on town councilors when they sat down to review the budget prior to a public hearing set for Jan. 29.

“I personally think a 2-mil increase is too much,” said council Chairman Paul Romanelli, who called for closer scrutiny of the budget in the future.

“We have a responsibility to maintain services and ratchet this down a notch,” he said.

But he also was aware of the difficulty faced by town officials and the budget committee as they wrestled with that very concept over the past two months.

“Everybody wants services to remain the same,” he said. “It’s quite a quandary.”

Councilor Hal Britton agreed, adding, “People are going to be upset over the increase, but you start cutting the budget and services, and they’re going to scream murder.”

The proposed budget, which includes the estimates for the Aroostook County tax and SAD 29, is $191,209 more than in 2000.

The largest increase – nearly $140,000 – is the result of the town’s decision during negotiations with municipal employees to pay full health insurance costs for employees and their families. Rapidly rising fuel costs – as much as 45 percent in some cases – also have forced increases in the budget.

James Brown, chairman of the town’s board of budget review, pointed out that despite the pending tax increase, the town was in good shape fiscally. He noted in particular that by 2008, the town will be out of debt, as various projects and equipment purchases are paid off.

Debt service for 2001 accounts for $271,000 in the budget or about 1.5 mils.

Romanelli agreed, but with caution added, “Long term, our outlook looks good. Short term, it’s going to be a challenge.”

To that point, Councilor Philip Bernaiche expressed his concern that town officials had not sharpened their pencils enough when drafting the new budget.

“We’ve got one hell of a budget here, and I don’t think we understand it that well, because we keep saying up and up and up,” he said.

He opposed almost all municipal projects, including replacement of 40-year-old furniture at the Parks and Recreation Department, repair of the steps and columns at the White Memorial Building, which houses the town’s museum and Chamber of Commerce, and the purchase of new hose for the fire department.

In addition, he also suggested that the town could save money by repairing rather than replacing a 1974 front-end loader that has been taken out of service for all but emergencies because it is unsafe and a 12-year-old pickup truck with more that 130,000 miles on it. The town’s Public Works Department uses both.

“We’re not doing much subtracting,” Bernaiche said. “We’re doing mostly adding.”