Over $1.4 million cut, tax increase at 9.5%
BAR HARBOR—The council unanimously approved tentatively adopting the Fiscal Year 2024 budget and scheduling it for a March 21, 2023 public hearing.
The Town Council, staff, and Warrant Committee have so far whittled the expected tax increase caused by the proposed Fiscal Year 2024 budget from 17 or 18% to a 9.5% increase.
“The proposed mil rate is 10.21, which is an increase of 9.5%,” interim Town Manager and Finance Director Sarah Gilbert said.
There were cuts of over $1.4 million to the original budget proposal. Many of the cuts were due to department heads withdrawing their requests for positions and service enhancements. Some cuts came from using ARPA funds (federal COVID-19 relief funds) for things such as a police department mental health liaison and additional support for the MDI YMCA and Jesup Memorial Library.
If this tentative budget passes in June, the tax rate will change from $9.32 to $10.21. That translates to a $60 increase for a home valued at $405,000.
The budget covers Fiscal Year 2024, which runs from July 2023 through June 2024. The council submits the budget to voters, which approve or tweak it at town meeting in June. Prior to that, the Warrant Committee submits official recommendations about the budget. Both the council and Warrant Committee are elected bodies with multiple seats contested at the June election.
The budget that will eventually be passed or tweaked again by voters will influence the mill rate. The mill rate then influences the tax bill.
According to Gilbert,
“With the current Town assessment, approximately $2,000,000,000, an estimate would be – for every $100,000 increase in expenditures, the mill rate increases $0.05.
“$500,000 assessed value in FY23, mill rate $9.32/per $1,000, annual tax, $4,660.
$500,000 assessed value in FY24, mill rate $9.82/per $1,000, annual tax, $4,910 with an increase of $1,000,000 in expenditures.”
There will also likely be a bond for school construction in front of the voters in June.
“I am concerned even about the 9.5% tax increase,” Councilor Gary Friedmann said Tuesday night, stressing that he thinks that the town will need to tighten its belt. “We’re going to have to start next year with a more lean and mean approach.”
Friedmann said he’s worried about cost of living expenses and capital improvements that will occur in future budgets and those implications for the tax payers.
Hochman agreed that the council would have to “sharpen the pencil” next year. He suggested looking at alternative revenue streams, grant opportunities, and pushing for local option sales tax.
There are bills before the legislature to both ban and prohibit local option sales tax, Councilor Jill Goldthwait told Hochman and fellow councilors.
At the time of the meeting there was not a definitive answer about whether cruise ship fees collected by the town when cruise ships visited could pay for cruise ship litigation, such as the current lawsuit in federal court. Gilbert said that the Maine Municipal Association (MMA) said that they couldn’t, but to ask Bar Harbor’s town attorney.
In an email Tuesday night, Gilbert verified that the town attorney felt the same as the Maine Municipal Association, writing, “MMA legal advised not to allow cruise Ship funds to be used for these expenses, and (the) town attorney gave the same opinion tonight.”
LINKS TO LEARN MORE
Tentative Bar Harbor Budget $37 million
5 days ago · 1 like · Carrie Jones
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