Madawaska takes stand against tax cap

MADAWASKA – Not unlike most Aroostook County municipalities, Madawaska stands to lose nearly half its property tax collections if the so-called Palesky tax cap is approved by voters in November.

The Board of Selectmen and the Madawaska School Committee on Tuesday signed a resolution against the proposal that could cut tax collections by 49.4 percent. The resolution was a unanimous decision by both boards.

The proposal would, according to figures released Tuesday by Town Manager Fred Ventresco, reduce operating budgets of the school and the town by $3,800,000.

The Palesky proposal would cap property taxes at $10 per $1,000 of assessed value, based on 1996-1997 values. It also would limit assessment increases to 2 percent a year while the property’s ownership remains in a family.

Already, a Maine Supreme Judicial Court majority has said in an advisory opinion that at least part of the proposal – its provision for establishing the value of property – would be unlawful.

Along with the loss of revenue, Madawaska officials feel that the long-term impact will result in increased state taxes and a shift in the control of local government to the state. They fear many local services would be reduced or eliminated under state control.

For education, according to school committee data, the tax cap would reduce municipal revenues in Maine by $530,000,000. Officials fear that would “devastate” Maine’s public schools and municipal services.

One example raised in Madawaska is that the allowed commitment under the tax cap proposal would be less than the town’s actual cost of education. Madawaska now pays $4,792,397 for education and the tax cap limit is more than $1 million less than that.

“I don’t want to say that the sky is falling, but it’s pretty close to that,” Ventresco said Tuesday. “We would have large decreases in municipal services.

“Some services may be cut entirely, or funded with service fees,” he said. “It depends a lot on what the state and federal governments mandate that we fund up front.”

The town office could be cut to two or three days per week, and some employees may be looking for work. Ventresco said it is tough to speculate on what would happen to Aroostook County’s second highest valued municipality

“It would be severe,” he said. “There is some fat that can be cut in our budget, but this proposal is way too much.”

The municipal administrator said it could come down to decisions about paving roads in the summer or plowing them in the winter.

“The best word I can think of is that it would be devastating to town services,” he said.

The only scenario the town has done is to cut all departments by 49.4 percent.

For example, the police department would go from a budget of $318,082 to $160,949, and the fire department would go from $114,263 to $57,817. Cutting spending by half, education would see a locally funded budget of $2,424,953 compared to today’s $4.7 million.

Madawaska’s equalized valuation, using state figures, is listed at $365,264,175. The tax cap would set the town’s tax commitment at $3,652,642. When municipal debt is added, $271,000, the total commitment would rise to $3,923,643.

Madawaska’s 2004 tax commitment is $7,578,501. The loss in property tax collections could be $3,654,858.

This year’s tax rate is 22.8 mills, or $22.80 per $1,000 in assessed value.