HOULTON – As the deadline draws near for the town to complete its 2003 budget, officials are trying to decide how to hold the line on taxes and not affect services.

At the Town Council meeting on Monday, tax-exempt property was discussed as a possible funding source.

The tax rate for this year is 27.50 mills and the town is facing a possible budget gap of as much as $250,000 next year because of expected cuts in state funding to the town and SAD 29.

One mill raises about $162,000 for the town.

Tax-exempt property in Houlton has a valuation of close to $50 million. The loss to the town in taxes is $1.2 million, or about 7.5 mills.

The exempt properties include Houlton Regional Hospital, local, state, county and federal facilities, schools, five fraternal organizations, 16 churches and five charitable organizations.

“All these entities put a burden on the municipality and the taxpayer has to assume the difference,” said Dale Felling, council chairman. “The time has come to do something.”

He suggested that the town could charge a fee for services rendered.

Flewelling said many of the organizations appeared to be in a position that they could make some kind of payment to the town to help offset the ever-increasing cost of municipal services such as fire, police, ambulance and public works.

Since many of the exempt properties, such as schools and government facilities, are exempt by state law, the town has little leverage to use to get any money from them to help cover municipal costs.

Past efforts by Houlton to get a payment in lieu of taxes from tax-exempt property owners have not been successful.

Before 1981 and again in 1992, letters asking for a payment in lieu of taxes got no response. Another letter was considered in 1994, but, based on experience, the council decided such an effort would be futile.

Describing the situation as “frustrating,” Flewelling said, “I think we have reached a point where we have to make a decision as a community.”

One idea that garnered support was to hold a workshop and meet with representatives of the exempt organizations to explain the town’s monetary dilemma.

We have to convince these people that they’re “living off us, but not paying [their] fair share,” said Councilor Michael Carpenter, who also cautioned that any effort to pry contributions from tax-exempt property owners would become a “political hot potato.”

No date was set for the workshop.