MILBRIDGE – This Washington County town is bracing for a possible 15 percent hike in taxes next fiscal year, an increase officials blame on fuel and school costs.

“We are estimating high now, but we expect a 10 to 15 percent rise,” said Town Manager Lewis Pinkham.

Pinkham expects the mill rate to make a noticeable jump from 7 to around 7.3, or $730 in taxes on a home valued at $100,000.

“A majority of the reason is … increasing school and fuel costs,” Pinkham said.

According to Doug McKay, who serves on the town’s board of assessors, 70 percent of the town’s taxes go toward schools.

In accordance with a law passed in 2004, the state should pay nearly 55 percent of education costs and municipalities must pick up the remaining 45 percent.

But the numbers aren’t adding up.

The school budget for Milbridge’s district, SAD 37, is up $375,530, from $8,192,875 in 2007-08 to $8,568,405 in the 2008-09 budget. The state is pitching in $2,879,625, 34 percent of the district’s overall budget, while the municipalities are raising the other $5,688,780.

“We still don’t have enough,” said SAD 37 Superintendent David Beal.

Beal forecasts the school district’s $200,000 gas budget to fall short this year by up to $50,000.

“That is just if gas prices stay the same,” he said. “If they go up that could go right out the window.

“Everything that surrounds that piece of life is going up,” he said. “Bus fuel, heating fuel and even food we are seeing rising costs in.”

Other factors are spurring increases as well.

“Special education is killing all the small towns,” said McKay. “It’s a bad situation. I don’t know the answer to it and I don’t know if anyone does.”

Special education is on the rise and is expensive, according to McKay and Beal. The district spent $1,533,050 on special education in 2007-08.

“You have to provide certain programs,” Beal said. “This includes occupational therapy, physical therapy and psychological services. Many times these services are outsourced.”

Eighteen percent of SAD 37’s student population is served by special education, according to Beal.

Special education in the state of Maine costs $250 million a year and increases 6 percent to 7 percent every year, said Jim Rier, director of finance and operations for the state Education Department.

“The cost is growing faster than most expenditures,” he said.

Some officials believe the federal government is to blame for the pressure put on state and local governments for special education programs.

“The feds mandate that states provide special education, but provide less than 40 percent of the funding for it,” said Martha Freeman, director of the Maine State Planning Office. “In Maine we have even been providing more services than the government mandates.”

Freeman said that special education and the No Child Left Behind Act were mandates created for the states to enforce with insufficient money.

This lack has resulted in higher taxes for many Maine towns, including Milbridge.

The less money the federal government gives states, the less the state gives towns, said Pinkham.

“Taxes aren’t lowered, they are just shifted,” he said.

Milbridge town officials agreed that part of the tax hike is due to a lack of state funding as a result of the town’s recent state equalized evaluation conducted by the Maine Revenue Services.

The evaluation determines the total property value for each town, according to Freeman. That value is put into an equation to figure out how much state funding a town receives for education. In general, the more money a town is worth, the less state funding it receives.

But “property value is just one of the factors we look at,” said Freeman.

Maine Revenue Services also looks at how many students a town has and how much it pays in salaries and transportation, she said.

According to officials, coastal towns in Maine, especially Milbridge, have seen consistent increases in valuation over the past three years.

“Milbridge’s value has been growing 25 percent a year,” said Rier. “That is a large increase.”

Town officials aren’t sure the increase in valuation is beneficial for the town.

With higher property values the district will receive less money for education, Beal said. “It is actually hurting the town. They are getting less money from the state. Just because Milbridge receives a higher valuation doesn’t mean the town has a greater tax base or is doing better financially.”

He called for a fundamental change in the way the state determines educational funding.

“Until they change the way they fund education and move away from property valuation, we won’t have a solution,” he said. “The state needs to find another way.”

Freeman could not speak specifically about Milbridge, but said property value should be a good determinant of how much money a town can afford to pay for education.

“If your house value is going up then that is some indication of how well-to-do you are,” she said. “A poorer town will get more of the share of the state school funding.”

She added that municipalities could choose which services they provide to keep taxes down.

Freeman said that the school consolidation plans will alleviate the pressure small towns are feeling from increasing taxes.

“Consolidation allows towns to hook up with their neighbors to do joint purchasing,” said Freeman.

But Milbridge officials don’t see any light at the end of the tunnel.

“Consolidation will provide some relief, but not the amount [the state] is expecting,” said Beal. “I don’t see it getting better at all. Next year will be more of the same.”

mdabrieo@bangordailynews.net

664-0524