September 20, 2024
TAX REFORM DEBATE THE ONE PERCEN

Bangor asks: What is price of tax relief?

BANGOR – Like their counterparts throughout Maine, Bangor taxpayers are begging for property-tax relief, and to some, a proposed statewide tax cap on the November election ballot is beginning to look appealing.

But at what cost? Are the trade-offs worth it?

Do Bangor homeowners want the city to continue picking up trash at curbside each week for no fee? Paving and patching streets? Plowing sidewalks?

Do they want Bangor to continue funding its own

emergency dispatch operation instead of joining the county’s regional service, a move that would save $150,000 in the first year and $250,000 in subsequent years? Do they want to continue supporting the public library? What about parks and recreation programming?

These are some of the issues city officials and voters will contemplate between now and Nov. 2.

A citizen initiative led by Carol Palesky and the Maine Taxpayers Action Network would reduce property-tax bills by capping tax rates at $10 per $1,000 of valuation, based on 1996 property valuations, and strictly limiting future increases. The potential loss of property-tax revenue has been projected at more than $600 million statewide, according to the Maine Municipal Association.

Bangor City Manager Edward Barrett and many of his counterparts in Maine are trying to answer those questions as they work to determine what would happen to city services if the Palesky tax-cap proposal passes.

“At this point, it’s hard to be specific, but it’s clear that many of the services people expect now would either not be provided at all or would be much less responsive. The question then becomes, at what level can you cut a service and still have it mean anything?”

The looming referendum played a prominent role in this year’s budget deliberations. But despite significant inroads into reducing the tax levy, Bangor officials found some budget cuts – chief among them, a plan to join the county dispatch program to save money – so unpopular locally that they reversed the decision within a week.

For Bangor, the implications are serious. The city stands to lose more than half of its tax income.

“‘Draconian’ is probably the best word to describe it,” said Councilor Gerry Palmer. “It would be very difficult for Bangor to get through something like that, but there is a sentiment out there. I think there’s a chance of this passing, but [the tax cap] is the wrong hammer for the nail in the sense that this is too much, too fast.”

“We’d have to make massive cuts, 10 times the cuts we made this year,” he said. “Positions would have to be cut. Those are people’s lives we’re talking about.”

Councilor Geoffrey Gratwick likened the proposed cap to “fixing a computer with a baseball bat” or “protesting the high costs of health care by refusing to buy medicine – understandable but not very smart.”

“After a year on the City Council, I have learned that Bangor spends local taxpayers’ money incredibly carefully,” he said Saturday. “A tax cap is an unsolicited gift to wealthy landowners from away by our libraries, schoolchildren, police, firemen and needy citizens.”

He added that the Palesky proposal is based on California’s Proposition 13. “We don’t want to be like California. The government there delivers less in the way of services and still costs more to run than almost any other state.”

In an April memo to city councilors, Barrett projected the budget impacts based on the budget year that ended June 30. Last fiscal year’s $70.7 million budget for city and school operations required $37.7 million in local taxes. Under the worst-case scenario, the city would have been limited to $15.9 million in tax revenues – or $21.8 million less – had the tax cap been in effect at that time.

On top of that was the $6 million in costs the city was obligated to pay by statute, namely the county tax of $1.8 million and debt service. Once those were factored in, the amount of tax revenue available for city and school operations dropped to $8.2 million, leaving a shortfall of as much as $24.8 million.

“Even if we gave all of the tax revenue to the school [department], the school would still have to cut,” Barrett said.

In order to get a handle on what a Bangor municipal budget might look like in a post-Palesky world, Barrett has given his department heads the task of preparing budgets reflecting reductions of 30 percent to 50 percent, depending on the department.

“We’re going to try to put together what we can do under Palesky and the implications that has,” Barrett said in an interview last week.

Though that process is still under way, Barrett said, the budgets being prepared will be based on priorities, with a focus on funding those municipal activities and programs that are mandated by state or federal law – with education the biggest by far – and have the “most direct link with public health and safety.”

Barrett said that a complicating factor for some functions, including the school department and the police and fire departments, is that personnel costs account for as much as 80 percent to 90 percent of their budgets.

Mandated services, according to a list developed as part of this year’s budget preparation process, run the gamut. They include animal control, general assistance, a treasurer and tax collector, the annual decorating of veterans graves, a fire chief, plumbing inspection services, the proposed subdivisions, snow removal to keep roads passable and keeping streets in repair “as to be safe and convenient for travel.”

“But even if services are required, you can look at the level of service provided,” Barrett said last week.

Once the priorities are built in, city officials would then have to determine which discretionary services – those not required by law or contract – Bangor could afford. These items, which last year amounted to more than $10 million, and staffing levels are among the few budget areas over which city officials have real control.

The discretionary list includes such services as parks and recreation, the public library, health and welfare operations like the city’s dental clinic for low-income kids and the public health nursing program, support for various nonprofit groups, and aid for private schools. It also includes a range of public safety services, including bomb squad, accident reconstruction, drug and homicide investigation and polygraph services now provided by the Police Department and such Fire Department services as technical rescue, educational outreach and juvenile-fire-setter intervention services.

Discretionary spending in Bangor in 2003

Following is a list of the discretionary services the city of Bangor provided last year that cost more than $100,000. The items were part of a longer, five-page list of discretionary services totaling $10.4 million prepared as part of this year’s budget process. They are discretionary in that they are not mandated by federal or state law or contractual obligation, but are among the expenses over which the city has some control:

. Public library, $1,353,207

. Enterprise fund, $787,492

. Sidewalk construction, plow ing and sanding, $303,632

. Emergency dispatch, $431,127

. Streetlight upkeep, $351,049

. Street paving, $339,435

. Highway department service to other departments, $255,695

. Highway citizen complaints, $232,386

. Trash collection, $257,680

. Downtown snow removal, $254,152

. Police special enforcement team, $245,241

. Highway emergency crew, $201,556

. Fire-equipment maintenance, $198,000

. Street patching, $195,354

. Building inspection, $179,979

. Sidewalk paving, $175,000

. Code enforcement customer service-record keeping, $174,960

. Public health nursing, $169,104

. Purchasing, centralized procurement, $126,673

. Private schools, $128,302

. Middle school police liaison, $125,563

. Convention and visitors bureau, $110,000


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