Bath wants voters to approve expanding the list of items exempt from its spending cap, or face the prospect of $900,000 in budget cuts.
Approving this change to the city charter won’t impact residents’ taxes, according to Interim City Manager Marc Meyers. Nor would it raise or reduce the spending cap.
It would only affect expenses listed under a certain part of the municipal budget.
In 1988, voters approved a spending cap to keep tax rates low. The cap fluctuates because it is based on the National Consumer Price Index, which measures the average change in prices of goods and services.
Some expenses, however, don’t count toward the city’s spending limit, such as grants, voter-approved bonds and insurance proceeds.
The city wants to broaden the list of what falls outside the spending cap. Examples include legally required employee programs and county taxes, said Meyers.
A change is needed because a tax agreement the city, state and Bath Iron Works made in 1997 to help the shipyard be more competitive will soon expire. Meyers said the agreement was made when “there was real concern that BIW may close or have a downshift in production.”
Revenue the city gets from the BIW tax agreement covers expenses like city salaries, road and infrastructure projects and economic development. Those expenses don’t count toward the city’s spending limit.
The tax agreement with BIW is set to expire Sept. 30, 2023. When it ends, all the expenses under the agreement would fall within the spending cap.
As a result, the city would have to make about $900,000 in cuts to stay under the spending cap, said Meyers. That would mean reducing essential services and amenities.
According to Meyers, a $900,000 cut is comparable to the loss of two fire and emergency medical technician positions, two patrol officers, one plow driver, curbside trash collection, road and sidewalk maintenance, funding for Main Street Bath, flowers, fireworks and holiday lights.
Potentially making matters worse, the city has been inching uncomfortably close to the spending cap.
Five years ago, city spending was $223,000 below the spending cap.
This year, the city was just $35,500 under the spending cap. That forced the city to “have some difficult conversations” on how to spend its money, Meyers said.
The city will hold an information session on Wednesday, Oct. 13 at 6 p.m. in the Bath city hall auditorium.
Voting will take place on Tuesday, Nov. 2. The polls will be open from 8 a.m. to 8 p.m. at Bath Middle School.
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