FREEPORT – Freeport officials are weighing budget options after learning that the town faces a substantial decrease in state revenue sharing, though not as severe as initially feared.
The state treasurer’s earlier projection of revenue sharing for Freeport was $543,137, and the new projection is $361,231, said Town Manager Peter Joseph during a July 2 Town Council meeting.
“This year we did budget conservatively because we knew there was going to be a reduction,” said Joseph.
The town had budgeted $500,000, out of its roughly $9 million spending plan, for revenue sharing funds in fiscal year 2014. The shift to the town will be $138,769 after subtracting the actual revenue sharing figure of $361,231 from the $500,000.
“This is a hair more than 10 cents on the mil rate if we just lost that revenue and had to make it up through taxation,” said Joseph.
Both Joseph and Freeport Finance Director Abigail Yacoben said they will look at a number of different options, including using the designated fund balance, increasing taxes, or, if directed by the council, making cuts to this year’s budget.
“This could be through a cut to services, a tax increase or we make it through a one-time funding source,” Joseph told the councilors. “The important thing to remember here is that it’s not $181,000 that we lost in state revenue sharing this year. It is also accompanied by roughly $200,000 in next year’s budget. So it’s a biennial cut of both years’ revenue sharing. That’s the way this state does it. So we will lose an additional $19,000 or $20,000 next year.”
In January, Gov. Paul LePage proposed that municipal revenue sharing be completely eliminated as a strategy to help balance the state budget. While that idea failed to gain much traction, the recently passed state budget included significant cuts to revenue sharing.
“Things could have been worse,” said Joseph.
The news was not a surprise to councilors and every option would be looked at, said Freeport District 2 Councilor Sarah Tracy.
The town of Pownal received $64,000, a $10,000 cut from last year, which will have little effect on its recently passed $3.1 million budget.
“I have always received more from (the state) than they tell us,” said Scott Seaver, administrative assistant for Pownal. “For example, if the state projects $75,000, chances are we end up with $80,000 or more.”
In Durham, the Board of Selectmen only used available revenue sharing funds for this year’s $2,602,881 budget, which resulted in a $79,000 shortfall that contributed to a 12 percent increase in taxes for the town’s roughly 4,000 residents.
As the battle over a state budget spilled into the end of June, municipal officials expressed a sense of relief that finally there were hard numbers to use.
“We all watched the state discussions on the edge of our seats,” said Yacoben. “We knew there were would be cuts. It was hard to even hazard a guess.”
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