PORTLAND – I am voting “no” on the proposed charter for Cumberland County (Question 4 on the Nov. 2 state ballot). I hope everyone who pays property taxes in Cumberland County also votes against it.
If enacted, the charter will increase property taxes in Portland and Cumberland County.
County government is primarily funded through a property tax levy that has to be added to the levy for municipal and school purposes. State law gives councilors and selectmen no choice in the matter.
Under current law, if county commissioners want to fund a project with general obligation bonds, a majority of the voters have to approve the bond in a countywide election.
Section 5.8.2 of the proposed charter eliminates voter approval for bonds that are as much as a tenth of a mill (.0001) of the county’s taxable property value. Those bonds can be approved by just three out of the five county commissioners. Only amounts in excess of that number will require voter approval.
What does that formula mean in terms of real money? It means that three commissioners could vote annually to issue a general obligation bond of $4.2 million.
Portland’s valuation makes up about 20 percent of the county’s taxable property. That means an annual property tax payment each year of $84,000 to repay just the principal on one year’s worth of bonds. Each additional $4.2 million bond brings an additional principal payment of $84,000 per year.
Today’s interest rates are unusually low, but historically, rates have been at a level that requires nearly as much interest as principal to pay off a bond, i.e. it has generally taken about $6.4 million to pay off a $4.2 million general obligation bond. That fact means that on an annual basis, Portland taxpayers would pay $128,000 for each county bond issue of $4.2 million for a 10-year cost of $1.28 million.
The county’s other communities and their taxpayers will also pay their share based on their taxable property.
Borrowing money is always a difficult decision, particularly in the current economic environment in which so many of our citizens are struggling to pay their bills. Each and every year our council and other elected officials across the state struggle to keep the property tax from going up even 1 cent. The fact that any particular county bond might only cost each taxpayer a few dollars per year avoids the hard fact that all the dollars add up to thousands of dollars on a property tax bill.
That’s why in Portland it takes seven of nine councilors to approve bonds, not the simple majority in the proposed county charter.
Two other counties in Maine have home rule charters: Aroostook County and Knox County. Neither of those charters contains the bonding authority in the proposed charter for Cumberland County, meaning that bonds in those counties still have to be submitted to the voters.
Furthermore, in both of those counties there is an elected budget committee, independent of the elected county commissioners, that establishes the budget for the county.
Commissioners may alter the budget committee’s budget only by a unanimous vote. Even then a two-thirds majority of the budget committee can override the commissioners.
The proposed charter for Cumberland County contains no such budget committee, leaving the current committee with its longstanding advisory-only status, making its role essentially meaningless.
Since its existence Cumberland County has managed to fund capital expenditures by including a portion in each annual budget for that purpose and putting the money into reserve accounts until there is enough money to buy what the county needs. There’s no reason in these economic times to move away from that system.
As chair of the council’s Finance Committee, I understand the pressing need to make capital improvements each year. Equipment needs to be replaced, buildings rehabilitated, investments made for future infrastructure.
There are a lot of competing needs and limited ways to pay for them, which is why a decade ago the City Council pledged to keep capital improvement bonds at $10 million a year or less, following a lengthy public process and supermajority vote.
Perhaps if additional benchmarks had been included in order to issue a general obligation bond, I would feel more comfortable with the proposed charter change. But without such measures, county commissioners should make their case for a bond to voters. If it is a good case, we will support it.
I encourage Portland and county voters to learn more about the proposed county charter and the proposal to permit the issuance of bonds. If you share in my concerns, join me in voting “no.”
– Special to The Press Herald
Send questions/comments to the editors.
