2015-01-23 / Front Page

Library leads expected Cape tax hike

By Duke Harrington
Contributing Writer

CAPE ELIZABETH — Officials in Cape Elizabeth are warning residents to brace for a tax hike of at least 2.4 percent next year — because that’s just the municipal side of the ledger, before accounting for the school budget.

At the Jan. 12 meeting of the Cape Elizabeth Town Council, Town Manager Michael McGovern gave what he terms a “high level” overview of his preliminary budget for the next fiscal year, to begin July 1. That presentation fulfilled a request made by the council last year that he submit a “budget outlook” prior to formulating an actual draft budget.

Leading that $9.2 million plan are payments on the $4 million bond approved by voters in November to rebuild the Thomas Memorial Library. Those costs, said McGovern, account for more than half of his anticipated 6.3 percent increase in municipal spending.

Assuming a $100,000 increase in revenue, from excise taxes and other sources, the $585,000 in new spending will add 40 cents to the town’s current property tax rate of $16.80 per $100,000 of assessed value. According to McGovern, that would add $120 per year to the tax bill of the median single-family home in Cape Elizabeth, assessed at $300,000.

First-year payouts for the library bond are expected to ring in at $300,000. Other factors driving next year’s budget include an average 2.5 percent hike in salaries and benefits for town employees, totaling $125,000. McGovern said he also has budgeted $100,000 for capital improvements and an across-the-board 1 percent increase in nonpayroll spending, adding $45,000. However, he noted that falling oil prices are expected to save the town about $30,000.

McGovern said he also expects to beef up the town’s legal fees account by $15,000, while budgeting $30,000 for a new human resources assistant to be shared with the school department. That person will be responsible for benefits administration and employee handbook maintenance, among other things, he said.

McGovern did warn councilors that his projections are preliminary, and could change dramatically depending on what happens in Augusta over the next few months. In his biennial budget, Gov. Paul LePage has put forth a plan to help balance the state books by cutting revenue sharing, the amount of sales taxes kicked back to the communities where the funds are generated. The current plan does not call on cutting those funds until the 2016- 2017 fiscal year. So, while there is no cuts expected for the budget McGovern is working on now, a $450,000 loss is looming for the following year, he said.

What could impact this year’s budget is LePage’s plan to eliminate the so-called “homestead exemption” on property tax bills for anyone age 64 and younger. In Cape, that $10,000 exemption on primary residences, half of which is reimbursed by the state, saved qualifying homeowners an average of $168 last year, McGovern said.

Also on the legislative docket is LePage’s proposal to cut the state’s share of teacher retirement costs — a $2 million line item in Cape — by 80 percent. What that might do to local tax bills will come into focus as the school budget gets hammered into shape.

“We’re in for an interesting session in Augusta,” McGovern said.

Return to top