CAPE ELIZABETH – While South Portland was able to incorporate the impact of the biennial state budget into its municipal spending plans, annual budgets in Scarborough and Cape Elizabeth already were set by the time the state Legislature completed its work last week.
Neither town had incorporated cuts in state revenue sharing into its budgeting plans, despite the fact that Gov. Paul LePage had called for a cut of all revenue sharing – a percent of sales taxes forwarded directly to municipalities – over the next two years.
According to Cape Elizabeth Town Manager Michael McGovern, his town expects a $350,000 cut in Maine State Revenue Sharing, from $640,000 to approximately $290,000. However, the Legislature also restored a $9.1 million cut to the homestead property tax exemption, proposed by LePage. That saves Cape $149,000, for a net loss of $ 201,000.
“The municipal budget is now adopted and may not be amended after May 31,” said McGovern, noting a deadline in the town charter. “However, the tax commitment is not finalized until August. The net effect of the legislative actions equates to 10 cents on the tax rate, which would result in the assessor setting a tax rate of $16.50 per $1,000 of valuation.”
The current tax rate in Cape Elizabeth is $15.84.
Given a 0.2 percent increase in townwide valuation, to $1.65 billion, the property tax rate was slated to increase 56 cents, to $16.40 per $1,000 of valuation. That means the median single-family home in Cape Elizabeth, assessed at $314,000, could have expected a property tax hike of $175.84, for a total bill of $5,149.60. The impact of the revenue sharing cut will add another $31.40 to that bill.
In Scarborough, Town Manager Tom Halls said he is waiting until the final word comes out of Augusta before making any amendments to the municipal budget.
“I have a firm understanding of the reductions as a result of the Legislative action on the budget, but it seems quite likely that the Governor will veto, in which case changes are possible (if not likely),” Hall said in an email on Tuesday. “I am not going to do anything until the dust settles in Augusta.”
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