Rockland officials mull tax cap impact on services

ROCKLAND – “Tax Cap, Wow” might summarize city administrators’ sentiments on the Palesky proposal.

The infrastructure of city government “would be decimated with the passage of the tax cap as proposed,” City Manager Tom Hall stated in a report last week. “The number of legal and technical glitches in the initiative are problematic and confirm our belief that this is poor legislation at best.”

The tax cap referendum was initiated by a citizen petition and will be on the Nov. 2 state ballot. If it passes, it would cap property taxes at 1 percent of their assessed value.

The so-called Palesky proposal would cap property taxes at $10 per $1,000 of assessed value, based on values in 1996-97. It also would limit assessment increases to 2 percent a year while the property’s ownership remains in a family.

Assuming the referendum’s provision to roll back tax assessments to the 1996 level is not upheld and figuring the tax cap’s impact based on the 2004 tax burden, Hall and Finance Director Robert Armelin figure the city would lose at least 41 percent of its revenues should the referendum pass.

“It’s probably the biggest thing the city’s ever faced,” Armelin said Tuesday. “It requires complete restructuring of the city.”

Forty-one percent equates to a $4.85 million loss in city coffers and the report does not consider revenues lost by departments that are closed.

After dividing city services into four categories – statutory, core, noncore and discretionary, the administrators wiped out the latter two service classes.

Armelin stressed that the details in the report represent an initial look at the impact of the tax cap.

The elimination of noncore services means no library, recreation, engineering, community development or support staff. Cutting discretionary services removes the Rockland Fish Pier, Shore Village Museum and external support.

In what remains under this scenario, there are further cuts to core services.

All general administration departments would receive a 30 percent reduction in appropriation, except for insurance.

To maintain full-time police coverage, three positions are eliminated – an officer, traffic enforcement officer and Maine Drug Enforcement Agent. Also, part-time animal control and summer traffic officers and all special duty officers would be cut.

The public works department would have a “skeleton crew,” Hall said Tuesday, with four full-time jobs lost in that department.

In addition, one code office staffer would be eliminated, general assistance would be maintained with a part-timer and fire department and solid waste services would become funded through separate fees rather than by property taxes.

After mapping out these suggested adjustments to city government, a $1.38 million shortfall remains for city councilors to consider, Hall said.

The silver lining in the tax cap proposal is getting people to think of better ways to run government, Hall said, but the tax cap itself is unrealistic.

The tax cap proposal is aimed at frustrations with Augusta, he said, but is “punishment at the local level.”

“It’s too simple to be constructive,” Hall said of the Palesky proposal.