ORRINGTON – The top taxpayer in town – Penobscot Energy Recovery Co. – would pay $265,000 less in taxes if the tax cap initiative before voters were passed Nov. 2, officials said.

PERC paid nearly $724,000 in property taxes this year. Under the tax cap, which would limit property taxes for residents and businesses to $10 for every $1,000 in assessed value, the town only would receive $467,000, which means PERC would save more than $265,801.

“It’s not just homeowners – it’s everybody” who would be affected by the lower property tax rate, Town Manager Dexter Johnson said Monday.

The projected savings for PERC and other businesses upset Superintendent Allan Snell, who said Monday that he and the school committee have been scrambling to figure out how to cut 31 percent of the budget and keep teachers.

“I don’t know how it’s going to be done,” school board chairwoman Kay Allcroft said. “There is no way we could [cut] 31 percent.”

Selectmen and members of the school committee gathered Monday at the school to discuss the initiative that is named after anti-tax advocate Carol Palesky of Topsham.

The top 20 property taxpayers in Orrington, which include three energy transportation companies and PERC, would save more than $550,000 in combined property taxes if the property tax is capped at 1 percent, a city document states.

At the same time, the town is projecting a $1.4 million, or 31.6 percent, loss in revenues. “There is not a lot of fluff in our municipal budget,” Johnson said. “I’m proud about it. There is nothing frivolous about it.”

Under the tax cap, the town is predicting cutting fire and police personnel, charging for trash pickup, reducing staff in the town office and for public works and possible cuts at the library.

Johnson said the town has been working for years on economic development and these projects all would need to be put on hold if the initiative passes.

State Rep. Richard Rosen of Bucksport said it’s true that tax relief is needed but added the tax cap is not the answer.

“It’s a bad proposition,” he said. “It goes after municipal governments but doesn’t touch the county or state. Not looking at the county and state is a flaw of this proposition.”

The school system is projecting $892,000 in cuts under the cap, which would come mostly from eliminating employees in the kindergarten through eighth grade program, Snell said.

“That has a major impact on K-8” because of the cost of high school tuition, he said. “We have to pay that fee.”

Because most of the cuts would have to be made from Center Drive School, the majority would be teacher reductions. Snell is predicting 11 or 12 teachers, seven education technicians, one custodian and one cook would be eliminated.

To offset the anticipated drop in revenues under the tax cap, the school committee has been discussing the possibility of:

. Cutting sports and other extracurricular activities.

. Charging for transportation of high school students.

. Contracting with one high school for a reduced rate.

. Increasing class sizes.