2013-07-19 / Community

Taxpayers get break

By Jack Flagler
Staff Writer

AUGUSTA – Property taxpayers in South Portland and Cape Elizabeth will have a lighter burden than they originally anticipated this year after the Maine Legislature appropriated more money than expected to school departments in both municipalities.

Voters in Cape Elizabeth and South Portland overwhelmingly voted to approve their respective school budgets early this summer. But while those votes were taking place in cities and towns throughout Maine, the Legislature had yet to finish deliberations about its own biennial budget.

Late in June, the Legislature finalized its biennial budget. The budget shifts $29 million in teacher retirement costs onto municipalities, but makes up for the shift by granting school departments $28 million more in general purpose aid.

The South Portland and Cape Elizabeth school departments had already accounted for the additional cost in teacher retirement payments during their budgeting process through spring and early summer, so both school departments decided to use the additional state funds to lighten the load on taxpayers.

The South Portland school department was awarded $5.5 million from the state in general purpose aid for the 2014 fiscal year, an $889,125 increase in the projected figure voters approved in a referendum June 11.

According to Superintendent Suzanne Godin, the additional money could not be expended through the operating budget – to create additional positions or purchase supplies, for example – without voter approval. Therefore, she recommended the South Portland Board of Education set aside $300,000 to offset the tax increase from the South Portland High School rebuilding project. The $40 million high school renovation bond was approved by voters in 2010; the project is scheduled to finish in 2015.

Godin wrote in a memo to the board dated July 3, the move will “be seen throughout the community as a significant step toward lessening taxes.”

The board of education voted unanimously, 6-0 with Chairman Rick Carter absent, to accept Godin’s recommendation.

The $300,000 offset will reduce the school budget’s overall impact on the tax rate by 9 cents per $1,000 of valuation, reducing the rate increase from 24 cents to 15 cents. The operating budget accounts for a six-cent increase on last year’s rate, while the impact of the debt from the renovation project is sliced in half, from 18 cents to 9 cents.

“I think it’s responsible on our part to try to lessen the effect, whatever it’s going to be, to the taxpayer. That’s just good faith. Nine cents doesn’t sound like a lot, but it is,” said school board member Sara Goldberg.

Overall, the tax rate in South Portland will drop from $16.80 to $16.71, now a 21-cent increase over last year’s rate of $16.50. That means a property owner with a home worth the median value of $195,000 would pay $17.55 less in taxes than originally planned.

The remaining $589,125 in additional state subsidy will go to the school department’s reserves. Godin said at the board’s July 8 meeting that money could be used if the state government institutes a curtailment.

When the state government issued a curtailment in December reducing general purpose aid by $12.58 million the South Portland School Department froze its budget. Should the same situation occur in the 2014 fiscal year, Godin said a freeze may not be necessary with nearly $600,000 available in additional reserves.

The additional general purpose aid funds to the Cape Elizabeth School Department will all be put toward tax relief, but the impact to property owners is somewhat offset by state subsidies to the municipal budget that are lower than originally projected.

Cape Elizabeth will receive $427,691 in additional general purpose aid funds, but money from municipal revenue sharing and the homestead exemption program will be a combined $234,478 lower than projected.

Overall, the town will receive a net $193,213 increase from the state, dropping the tax rate 12 cents per $1,000 of valuation from $16.40 to $16.28.

Cape Elizabeth School Department Business Manager Pauline Aportria said a school board vote was not necessary because a provision was already included in the original budget proposal saying any additional funds would all be put toward property tax relief.

The Cape Elizabeth Town Council approved the adjustments to both the school and municipal side of the budget at its meeting July 8. our website know your

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