Portland Mayor Ethan Strimling is proposing a list of changes to the city manager’s $247 million budget proposal as a way to head off reductions to school spending and to help shift the tax burden from residents to businesses and landlords.
“This is my best shot at trying to make sure our values are reflected in the budget as deeply as possible,” Strimling said in an interview Monday afternoon. Strimling formally presented his recommendation at a council meeting later Monday.
A nonprofit business group, however, said that increasing property taxes on downtown business would not help the city’s budget. And a representative of the Southern Maine Landlord Association said a proposed 43 percent increase on rental registration fees “erodes the trust of the housing providers in our community” who originally supported the new fees to increase housing safety in the wake of the Noyes Street fire that killed six people in 2014.
The municipal budget is still being reviewed by the City Council’s Finance Committee, which is expected vote Wednesday on a recommendation to the full council. Another public hearing on the school budget will be held next Monday.
According to budget amendments prepared for the mayor, Strimling wants to cut or delay nearly $500,000 in spending from the city manager’s budget proposal, while increasing a variety of business fees to raise nearly $1.2 million in additional revenue.
The recommended changes, projected by Strimling to reduce the tax impact of the city budget by nearly $1.7 million, were presented during the mayor’s annual budget comments, which were followed by a public hearing on the school budget.
About three dozen supporters of the school budget urged the council not to make any additional cuts that could close island schools, eliminate teacher positions or reduce programs such as art, music or physical education.
Jenn Boggs, who has a second-grader at Longfellow Elementary School, urged the council to support the current budget. “If you make changes – see you next Monday,” she said, reference the next budget hearing.
Christina Foster, who lives on Peaks Island, was worried about the future of the island school. She, too, urged support for the full budget, pointing to the passage last fall of a $64 million bond to renovate four elementary schools. “Obviously, the city is willing to pay more to make sure we have a vibrant school district,” she said.
Strimling budget amendments
Only three people voiced concern about the school budget. Joan Gildart said it was “unfair” for budget supporters to paint people who are concerned about property taxes as anti-education. She said the city should fight harder for education funding, rather that turning so quickly to property taxes.
“We need to be putting far more pressure up in Augusta and I’m counting on you, Mr. Strimling, to lead that effort,” she said. “We need to stop this business of shuffling everything off on the taxpayer. Education is not going to end if we don’t fund every aspect of the school budget.”
MAYOR’S CHANGES
Before the public hearing, Strimling delivered some brief remarks about the city budget, urging councilors to consider city and school spending together when seeking to reduce the combined 4.5 percent increase in property taxes.
Strimling said he doesn’t believe the city budget or the school budget needs to be reduced, noting that one year the combined city and school budget increased by 4.8 percent.
“That is apparently what was needed in those, and that is what this body enacted,” Strimling said. “We looked at our budget as one, and we passed it accordingly. I hope we will do the same again.”
The City Charter requires the mayor to provide budget comments and “convene and lead” the City Council in its annual goal-setting session.
This year, however, Strimling did not attend the council’s goal-setting session, during which it instructed City Manager Jon Jennings to limit the property tax increase to between 2.5 percent and 2.9 percent in the municipal budget.
And while the charter also calls on the mayor to deliver his budget remarks when the manager presents his budget to the council, Strimling did not do so, making this the second time in the last three years the mayor has delivered his comments at the end of the budget process.
Strimling, who serves on the council’s Finance Committee, has been an early and vocal supporter of Superintendent Xavier Botana’s original $113 million school budget proposal, which called for a 9.7 percent increase in the school’s portion of the tax rate.
Although it has been pared back to $112 million and a 6.5 percent increase, Councilors Nicholas Mavodones and Justin Costa, who also serve on the three-member Finance Committee, have said more reductions are needed.
Botana has said that the city is getting $3.4 million less in state education aid than it originally expected. In addition to $1.9 million in wage increases required by existing contracts and $2.2 million in additional benefits, the school budget includes expanded programs and 10 additional positions in line with the school board’s long-term goals.
At the end of a committee meeting last week, Strimling clashed with Mavodones, Costa and Jennings. The mayor had asked Jennings to prepare a list of $1.6 million in cuts on the municipal side of the budget. However, Mavodones and Costa did not support that request, since Jennings delivered a budget within council guidance.
In terms of revenues, Strimling predicts the city could raise an additional $500,000 by increasing permitting fees from 1.5 percent to 1.75 percent plus an additional $250,000 by increasing fees on short-term rentals. He’s also proposing a $15-a-unit increase in rental registrations, which he estimates will raise an additional $250,000.
He also proposes eliminating new fees for Little League, before- and after-school care, and summer camp.
“I’m trying to rebalance (property taxes),” Strimling said, noting that 41 percent of the city’s property taxes are paid by commercial property owners, while the remaining 59 percent are paid by residents. “The burden on our middle class folks is heavier than it should be, so I’m looking to make a shift” to businesses.
Casey Gilbert, executive director of Portland Downtown, a business improvement district made up of downtown property owners, said that Strimling’s proposal to increase the tax assessment on businesses in the district would not go to the city’s General Fund. It’s a supplemental tax to raise revenue for priorities identified by the nonprofit’s board of directors, she said.
“An increase in mil rate will not help to fill the gap in the city’s budget, but would help us to expand our programs and services,” Gilbert said. “Portland Downtown does support four full-time police cadets and we are happy to assist the city in many other ways through creative partnerships, such as the Graffiti Busters program. Our organization also helps raise thousands for other local nonprofits every year. As such, we contribute more than our fair share to help Portland remain vibrant and we take pride in our role in the community.”
Strimling later clarified that he wants to charge downtown businesses more for city services provided within the district.
Brit Vitalius, president of the Southern Maine Landlord Association, criticized Strimling’s proposal to increase rental registration fees. The mayor has been at odds with landlords over his proposals to increase tenant protections while limiting a landlord’s ability to increase rents and evict tenants. Landlords have also been frustrated by the lack of even enforcement of rental rules. Vitalius said the fees were originally designed to fund inspections not being done by firefighters, primarily single family, duplexes and three-unit buildings.
“I expect the department is already overfunded. The mayor’s proposal is extremely disappointing,” he said. “In the wake of the Noyes Street fire, housing providers came to the table, assisted in the creation of the housing safety office, and voluntarily supported the $35/unit fee for fire safety and a consistent inspection process. For the mayor to now attempt such a dramatic increase in the fee erodes the trust of the housing providers in our community.”
On the expenditure side, Strimling is proposing to make a new waterfront position and a new insurance claim position part time, and he wants to delay adding a waterfront position, waterfront foreperson and assistant city manager for one year. He’s also proposing the elimination of two telecommunicator positions that have been vacant for 18 months. Those positions, among others, could be reconsidered in future budgets, he said.
In addition to proposing to eliminate $100,000 in contingency funds, Strimling has also identified “luxuries we can’t afford,” which include $36,000 on Fourth of July fireworks, $68,000 in dues to the Greater Portland Council of Governments, and $24,000 for GPS for golf carts at the Riverside Golf Course.
He’s also proposing a $100,000 reduction in planned salary increases for nonunion officials already making over $100,000. He’s proposing to add $100,000 to fully implement the city’s pesticides ordinance, $150,000 for two community policing positions that the city has had a hard time filling, and $45,000 for the Portland Opportunity Crew that offers work to panhandlers.
Strimling projects that his amendments would reduce the property tax increase on the city side of the budget to less than 0.5 percent.
The $112 million school budget reflects a 6.4 percent increase in the school portion of the tax rate – which is about half the municipal budget – and would add $163.20 to the tax bill of the average home in Portland, which is valued at about $240,000.
When the proposed $247 million city budget is combined with the most recent proposed school budget, residents could see a roughly 4.5 percent increase in their property taxes, from $21.65 per $1,000 of assessed value to $22.62. That would add about $250 to the annual tax bill of a home assessed at $250,000.
The council is scheduled to vote on the school budget on May 14, setting up a citywide school budget referendum on June 12.
The council is scheduled to vote on the municipal budget on May 21.
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