BRUNSWICK — Town officials decided Thursday to set aside money gained from a boost in the town’s taxable value for later use rather than to use it to offset property taxes.
A development boom and changes to state tax relief programs boosted Brunswick’s taxable value approximately $70 million beyond what officials projected for 2021, resulting in a roughly $1.4 million surplus.
According to Julia Henze, Brunswick’s finance director, the additional money gives the town some flexibility and is, overall, “a good problem to have.” However, she urged officials to be strategic with their spending, “with the economic uncertainties facing the town in the coming years.”
Henze suggested the council use some of the funds to reduce the tax rate from a 3.3% increase to a 2.99% increase, which would result in a 6-cent drop in the mill rate.
She also recommended the council appropriate a portion of the roughly $1.3 million remaining to help the school department and “forgive” the $638,905 advance on the Brunswick High School track project. The town council cannot appropriate additional funds to the school budget without sending the question to the voters, but by forgiving the advance it would “free up” the same amount of money for other uses.
Finally, Henze suggested a portion be set aside to cover unanticipated revenue shortfalls, deferred property tax revenue (which she said may require an additional $200,000 in 2020 and 2021, and the Graham Road Closure, the cost of which continues to rise.)
Ultimately, though, the council voted to leave the tax rate alone and send the whole $1.4 million to the unassigned fund balance — essentially surplus — to be distributed at a later date.
If the council used almost the entire overlay to offset the property tax burden, residents would have seen a 0.25% tax increase, or a tax bill $10 higher than last year for the average taxpayer.
By lowering the tax increase to 2.99% the average taxpayer would have saved about $12 for the year. Town officials argued $1.4 million could go much further in supporting municipal services or preventative measures on potentially costly projects.
“I understand $12 is $12, and I don’t dismiss that at all,” Councilor Kathy Wilson said, but by leaving the tax rate alone and putting the money aside for reserves or to do a little paving, “I would like my $12 to go to that.”
Councilor Steve Walker agreed and added that this early in the year, with the pandemic still in full swing and October and winter storms likely, “we have no idea what’s coming.”
Getting the budget down to the 3.30% tax increase was a “hard fought point,” Councilor Jim Mason said, and should be left alone.
“We cut things, we chose to get rid of programs,” he said. “To further cut it and jeopardize these programs or the safety net (for) later this year. … It should stay where it is.”
Council Chair John Perreault was the only dissenting vote.
In June, the council ended a grueling budget season with an essentially flat budget that required millions of dollars worth of cuts on both the school and town sides to help mitigate the impacts of the coronavirus pandemic.
Both the school and municipal budgets managed to whittle figures down enough so that residents will ultimately see just a 3.3% tax increase due to the Kate Furbish Elementary School debt service and the county tax. This will increase the tax rate, currently $19.72 per $1,000 of valuation, to $20.37, meaning the tax bill for a $200,000 home would increase about $130 to $4,074. Otherwise, municipal and school budgets had a 0% impact on the tax rate.
The budget includes no layoffs but does leave several town positions open.
The millions of cuts were necessitated by over $775,000 worth of revenue estimates that were decreased dramatically after the coronavirus pandemic hit. Counted-on funds from state revenue sharing, excise tax and interest revenue have all been slashed. Officials also allocated $150,000 from the fund balance to help offset operational expenses.
In July Brunswick voters approved the roughly $42 million school budget.
The school budget is largely driven by the first $1.4 million payment of the $20.3 million Kate Furbish Elementary School, which is slated to open later this month.
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