Houlton, County towns unite in opposing tax cap

HOULTON – Town councilors joined a growing number of municipalities and school boards on Tuesday evening when they adopted a resolution opposing the 1 percent tax cap referendum.

All but one of the councilors voted in support of the resolution, which decries the so-called Palesky tax cap, named after Topsham tax activist Carol Palesky.

If approved, the plan would scale back assessed property values to their 1996-97 level and cap property taxes at $10 per $1,000 of valuation. It also would limit assessments to an increase of 2 percent a year while a property remains in a family.

State supreme court justices and the state attorney general have advised that a rollback of property values to 1996 levels is unconstitutional.

According to an impact analysis by the Maine Municipal Association, the town’s property tax commitment would be reduced by 58.1 percent if voters approve the measure. Local officials say Houlton stands to lose about $2.7 million in revenues if voters adopt the referendum.

“All of us are quite aware of the tax cap,” interim Town Manager Phil McCarthy said at the meeting. “The council is in a position where you can state how you feel about this.”

The resolution stemmed from several factors, including the majority of councilors believing that the cap “would not have a fair and equal impact” on all of the town’s residents.

The declaration also calls for councilors to “press for speedy implementation” of initiatives that require the state to pay for 55 percent of the cost of education.

Voters passed the referendum in June, which pressures the state into paying the increased percentage to schools in order to lower property taxes.

For the past two months, many town officials have warned of the potential “devastating” impact of the cap on the municipal budget.

Houlton has formed a tax cap committee to discuss the issue, and all eight members of that panel opposed the upcoming referendum at a meeting earlier in the week. The group cited figures that illustrated that the measure would gut administrative budgets and threaten the quality of education.

Selectmen in Madawaska and St. Agatha also signed a resolution opposing the Palesky plan, as well as city councilors in Presque Isle, and school boards in Washburn and Houlton.

Tax cap supporters have accused municipalities of using “scare tactics” when officials release information about the potential impact of the referendum.

Councilor Phil Bernaiche is an ardent backer of the Palesky plan, insisting that Houlton’s 26.50 mill rate is too high. The council contends that the town does not need the $1.4 million that it has in surplus and should “give it back to the people.”

Stan Ginish, a Houlton resident who recently joined the new tax cap committee, has also spoken in favor of the upcoming referendum.

Ginish has accused city and town governments of “wasting money,” and said recently that Houlton could save a substantial amount of money by consolidating schools and other services.

Town officials are encouraging the public to attend the tax cap meeting scheduled for 6:30 p.m. Monday, Oct. 4, at the town office.