SOUTH PORTLAND – Just in time for the July 1 start of the new fiscal year, the South Portland City Council voted unanimously Monday to approve an $88.93 million spending plan that is expected to drive local property taxes up 2.12 percent.

After other revenues, the need from taxes will rise $1.17 million, or 2.1 percent, to $57.01 million. According to City Manager Jim Gailey, that is expected to drive the property tax rate up 35 cents, to $16.85 per $1,000 of valuation. In other words, the median single-family home in South Portland, assessed at $195,000, can expect a tax hike of $68.25, to $3,286.

General fund operating budgets are up $2.57 million, or 3.57 percent, a significant miss on the 1 percent hike Mayor Tom Blake called for in his inaugural address in December. Still, he said Monday, “Our budget is about as tight as it can go.”

“I’ve lived in this city 30 years and didn’t know there was this much going on,” said Councilor Michael Pock, newly elected in March at the start of this year’s budgeting season. Although elected as a fiscal hawk, Pock said his eyes were opened during the budgeting process to the number of services the city provides.

The municipal operating budget for 2013-2014 is up $496,152, or 1.74 percent, to $29.08 million, of which $17.47 million will come from taxes – a $203,749, or 1.18 percent, increase.

The school budget, meanwhile, which eats nearly 65 cents of every tax dollar, is up $2.99 million, or 7.46 percent, to $43 million. However, after squirreling away $1.35 million last year to make future payments on the $41.5 million high school renovation bond, the school only needed $300,000 this year. That lowered the overall school budget to a $1.94 million, or 4.68 percent, increase, translating to a $829,246, or 2.27 percent, hike in the need from taxes, even though tax dollars needed to support the school operating budget jumped $1.88 million, or 5.33 percent.

South Portland’s bill for its share of Cumberland County government surged $140,047, or 6.75 percent, to $2.22 million.

The City Council also voted unanimously to approve a 9 cent rate hike in sewer user fees, to $4.57 per 100 cubic feet of water consumption, to support a $5.46 million sewer fund budget that’s up $60,494, or 1.12 percent.

In last-minute changes Monday, the City Council unanimously approved a 1.5 percent “cost-of-living” pay raise for 108 full-time and 21 “permanent part-time” employees in South Portland not covered by union contracts. That added $104,965 to the budget.

The council also incorporated as part of its annual appropriations resolve the impact of the state biennial budget on revenue sharing. In his budget presentation, the slide representing revenue sharing was colored black, Gailey said, to reflect his mood following the news out of Augusta.

State funding

Still, the numbers were not as bad as they could have been. The original state budget proposed by Gov. Paul LePage called for the cut of all revenue sharing for the next two years. That would have cost South Portland nearly $3 million next year alone.

Instead, the $6.3 billion compromise budget passed June 13 by the state Legislature restored about 65 percent of what had been cut, largely by enacting temporary hikes to sales taxes, up from 5 percent to 5.5 percent, and the meals-and-lodging tax, up from 7 to 8 percent.

While the numbers are not final – LePage has promised to veto the budget, although it passed by numbers that would override that decision by a slim margin so long as support does not waiver in the House – Gailey said South Portland can expect to lose $651,000 from its state subsidies, a 30 percent cut.

Gailey absorbed most of that hit by upping revenue projections for the upcoming year, including excise taxes ($200,000), building permits ($55,000), business equipment tax exemption refunds ($50,000), ambulance fees ($15,000) and transit fares ($10,000). The council also approved taking an additional $150,000 from the city’s $9.3 million undesignated fund balance.

Although Gailey said he does expect a still slumping economy to cost South Portland $100,000 in investment income next year, a late $60,839 reduction in the city’s assessment to ecomaine and a $120,000 cut in the solid waste firm’s “tipping fee” for disposal presented a rare ray of sunshine. Other last-minute changes to the budget previously approved by the council include a $41,500 cut in contracted services and a $45,500 savings from “reorganizing of a deputy parks position.”

That and other smaller savings allowed South Portland to remain a member of the Greater Portland Council of Governments, restoring a previous $25,002 cut. Also back in is $8,000 of $11,050 previously cut from employee training and $15,000 of $35,000 cut from contributions to the Home Visiting Nurses Association, as well as $94,000 previously slashed from annual road paving projects.

The final budget also includes $120,000 to expand public transportation by adding a new weekday bus run.

On Monday, the City Council also voted unanimously to appropriate $1.1 million from its undesignated surplus account into a Tax Rate Stabilization Reserve account, which has a $600,000 balance. Next year, South Portland will draw $500,000 from that account – including $400,000 originally budgeted and the $150,000 added following the cut in state revenue sharing – in an attempt to keep taxes from jumping as high as they might otherwise.

Gailey said he expects to draw an additional $500,000 from the reserve in the fiscal year ending June 30, 2015, followed by annual appropriations of $350,000, $200,000 and $100,000, respectively.

“This methodology allows the impact of the use of fund balance to fund the budget to be spread over a series of years while not creating a major shortfall in future budgets,” said Gailey.

Copy the Story Link