The Wiscasset Board of Selectmen may soon call a special town meeting to request authority to use reserve funds to prevent another tax hike. With $2.5 million in lost valuation from an increase in the homestead exemption and $1.1 million in lost valuation from Maine Yankee property, the town needs about $650,000 to hold the current mil rate of $18.71, Town Manager Marian Anderson said.
The town’s new auditing firm, William H. Brewer & Co., is still reviewing the books to determine the actual surplus figure available for use to offset the 2017-2018 tax commitment, Anderson said. However, Anderson estimated that about $250,000 will be available for use, requiring the use of reserve funds if the selectmen want to prevent another tax hike.
If the town does not use surplus or reserves to offset the tax commitment, the mil rate would jump to $20.15, Anderson said, a 7.69 percent hike. The 2016-2017 mil rate of $18.71 was a 14.1 percent tax hike from 2015-2016.
The mil rate determines the tax per $1,000 of property value. For example, the owner of a $100,000 property would pay $1,871 in taxes under the current rate.
The selectmen learned about the potential tax hike just hours before their Tuesday, Sept. 5 meeting.
“The five members of the board were shocked today,” Chair Judy Colby said.
With only a nominal increase in the municipal budget and a flat education budget for 2017-2018, the selectmen were under the impression that the mil rate would remain stable.
There is currently about $14 million in the town’s reserves, Selectman Jeff Slack said. The town typically uses the funds only for capital improvement projects.
Some selectmen have objected to holding special town meetings in the past.
“The only reason I’m supporting this special town meeting is because this is an emergency,” Selectman Ben Rines said.
The selectmen previously voted to use $380,640 from the sale of the primary school to reduce the tax commitment. That figure was not included in Anderson’s surplus estimate, she said.
Several selectmen questioned where those funds are and what the surplus figure will be when they are included. “There’s the potential that we already have $600,000 in the fund balance,” Slack said.
Even if there is enough money in the fund balance to hold the mil rate for the 2017-2018 fiscal year, the town is “between a rock and a hard place” for the next fiscal year, Colby said.
“The townspeople deserve to know what the financial situation of the town is,” Colby said. “It’s bad. Selectmen have some very tough decisions to make in the next year.”
Selectman Bob Blagden made a motion to direct the town manager to cut $500,000 – almost 10 percent – from the 2018-2019 municipal budget. The 2017-2018 municipal budget totals $5.2 million.
The motion was quickly seconded and unanimously approved. “We need to make serious cuts in the next budget. The townspeople can’t take their tax bills anymore,” Colby said.
Selectmen will hold a special meeting at 6:30 p.m., Tuesday, Sept. 12 to discuss the tax commitment and determine how much money from reserves to request at the special town meeting. The auditor should have a solid surplus figure for the meeting, Anderson said.
Resident Jason Putnam asked if the amount to come from reserves would include $374,307 the town owes the Wiscasset School Department from 2014-2015. The money owed to the school “is still a work in progress,” Anderson said, and several selectmen have contested whether the money should be paid to the school.
“Honestly, right now, we don’t have it,” Anderson said.