Newport institutes spending freeze

NEWPORT – Town Manager James Ricker told the selectmen Wednesday night that he has frozen all unnecessary expenditures, such as paving and road construction, as a result of the depletion of Newport’s cash on hand.

Normally, the town’s taxes would have been committed by now, explained Ricker, and cash would have been flowing into the town coffers.

The delay has been the failure of voters to pass a SAD 48 budget last month, which triggered a number of state requirements.

Ricker said he is going to gamble and set the mill rate and commit the taxes later this week, despite not knowing how much he will need.

Newport must make monthly school payments based on the original budget presented to voters, which was defeated in June by a 2-to-1 margin. Ricker explained that the defeated budget stands until a new one is passed and this is costing Newport an additional $25,000 a month, over and above what had been paid to the district last year.

The town assessor had been waiting for a budget to be adopted before committing the taxes, but Ricker told the board that he couldn’t wait any longer. “The tax bills haven’t gone out and we’re running out of money,” he said. Even with the spending freeze, Ricker said “We are not in a crisis mode yet, but we will be before the next selectmen’s meeting.”

He and the tax assessor will continue to review the situation and set a new tax rate this Friday. “We will base that rate on the school district’s proposal as it appears on the July 31 ballot,” he said.

He also will recommend a $25,000 to $30,000 overlay, which may leave the town short of funds if the taxpayers raise the school budget.

But, he acknowledged, the town could be in just as much difficulty if the voters cut the budget by a large amount and the town ends up with too much money in its overlay account. The state caps how much can be held for surplus and in a normal year Newport would set aside $50,000 to $60,000.

Ricker said the mill rate will likely drop because the valuation of each property will increase. “This is a very, very serious situation we are in,” he said.

He said several other SAD 48 towns are in a similar situation and are looking at borrowing tax anticipation money. “I don’t want to borrow any more money,” he said. “It is not in our budget.”

The SAD 48 proposal, at slightly less than $17 million, will be voted on at a July 31 referendum.