Update: SB Town Budget
The Town Council has made some headway on getting the budget down. They’ve got spending down below 2008 levels but revenues from excise taxes, car registrations, and building permits continue to be way below expectations so it still means a tax increase. Read more in this Foster’s Daily Democrat article:
South Berwick looking at tax rate increase due to revenue shortfall
Foster’s Daily Democrat
Though the Town Council has slashed nearly $1 million from the first draft of its 2009 municipal budget — in the process actually bringing expenditures below 2008 levels — taxpayers are still looking at a tax rate increase due to a factor largely out of town’s control: revenue.
Tags: budget, so. berwick government, town council
April 22nd, 2008 at 1:20 pm
Maybe the police can increase the enforcement of the registration laws, and get the scofflaws to register their vehicles legally.
If you want to register yor vehicle in New Hampshirethen move there.
The money from this and the excise tax is used to support the roads you drive on.
This may not add up to alot, but every penny helps.
I am not trying to disparage the police in any way, but this type of thing has been happening for way too long.
April 22nd, 2008 at 4:32 pm
I’m with you Dave. Kittery had a very well publicized crackdown a couple of years back. With the threat of additional fines, you bet people started taking the law seriously! And it should be fairly easy to enforce.
April 22nd, 2008 at 4:48 pm
Maybe the town can bill these people seperately for road maintanace, snow removal, etc based on a somewhat calculated per vehicle cost.
If they start getting a yearly bill for $500 to $1000 then maybe they’ll think again about registering in Maine.
Either that or fine them a couple of grand.
April 22nd, 2008 at 5:24 pm
I know that income is down for the town, but I think 18% is a large tax increase especially when the cost of living has increased so dramatically. I also feel that it sends entirely the wrong message to purchase property at $880K at a time when we are being asked to support an 18% tax increase, regardless of how good an investment this purchase is believed to be. The building requires repairs, which is why it is being sold - this too will have to be paid for.
I also wonder if we could have built a library on a parcel of land that would adequately serve the community for the money that was spent on this property. The library does not have to be near the middle of town. It needs to have adequate parking, be handicapped accessible, have climate control, and have adequate space, support equipment, and furniture.
I realize that it is not easy to solve the budget problems that we and other towns are encountering. I also realize that serving on the town council is a thankless job and not everyone will be pleased regardless of the decisions that are made. I also am not naive enough to think that our taxes will not go up. This being said, however, I still feel that the 18% tax increase is a bit much to swallow.
April 22nd, 2008 at 8:54 pm
mikec - St. Michael’s Church is being sold for a variety of reasons, only one of which is the cost of the repairs. In actuality, the church space is no longer large enough for the parish community, now that St. Michael’s has merged with Out Lady of Peace in Berwick. There is simply not enough parking or building space to accommodate the parishoners for masses and no longer adequate space for religious education programs and parish-wide social activites. Indeed, many repairs are needed at the Young Street building. Hopefully many of them can be addressed and the space will become a vital part of the heart of downtown.
April 22nd, 2008 at 9:34 pm
This purchase of the church, now in the current environment is simply ridiculous. the appraisal didn’t even come in as high as the purchase price “negotiated” for the town. So, right from the get go, its going to be problematic to insure. No one is going to insure the building for more than it is worth, the appraisal.
The Town Council seems to still be in the thrall of the spin of the past couple of years that “if you don’t buy it now, you’ll pay more for it next year”. The mantra of the real estate agents.
Well, here’s some cold water. No we won’t. We’d probably be able to negotiate a purchase price 15-20% LOWER next year. The sub prime/credit crises is not over, not half over, IT IS IN THE EARLY stages. To date, we have been seeing the worst, the most excessive mortgages fail. Now, Alt A mortgages, the next step up from subprime, are starting to report increasing delinquincies & failures. Next, about nine months from now, we’re going to see the start of the wave of “Options ARMS” mortgages going down.
Some sanity needs to prevail. Some actual financial expertise needs to be tapped. Lawyers are lawyers — they are not financial people. They are not mortgage experts. Most have no clue whatsoever about what is happening in the credit markets.
Completing this purchase now, particularly in light of the Town’s budget situation, is ludicrous. It is just another example of well intentioned folks getting hustled along briskly by real estate agents.
And by the way, where’s the “competing bid” that must be around? Who are we trying to snatch this property out of the jaws of????????????? Hello?????? Developers can’t get money now.
April 24th, 2008 at 8:55 am
TAKE A CLOSER LOOK AT THE FACTS.
This article says the reason we have a problem is lack of revenues.
The biggest drop in “revenues” is “Use of Undesignated Funds.” Below is a history of this line item used as a “revenue” source in the Town’s budgets. Notice that for year 08/09 the number is a big ZERO.
99/00 $250,000 13% of budgeted revenue
00/01 $365,000 17% of budgeted revenue
01/02 $600,000 24% of budgeted revenue
02/03 $600,000 23% of budgeted revenue
03/04 $370,000 17% of budgeted revenue
04/05 $400,000 18% of budgeted revenue
05/06 $500,000 18% of budgeted revenue
06/07 $450,000 14% of budgeted revenue
07/08 $500,000 16% of budgeted revenue
08/09 $ ZERO
The real reason this number is ZERO is because the “Undesignated Fund” has been managed in a different way over the last three or four years.
Between 2004 and 2007 the Town has drained its nest egg (the Undesignated Fund Balance) by $717,425, without replenishing it.
The nest egg, termed the “Undesignated Fund Balance,” is important because it is used to cover “timing” issues. A household example of the “timing” issue that we can all relate to is:
I put into savings every two weeks so that when the time comes I have a large amount of money to pay an upcoming bill such as a property tax bill. After that bill is paid I then continue to replenish my savings account so that I can do it again the following year. In this scenario, as long as I actually do replenish my savings account I am living within my means.
When the Town of South Berwick votes to use Undesignated Fund Balance towards the upcoming budgeted appropriations it must realize that during the year the undesignated fund balance needs to be replenished.
Without replenishing the fund it is simply known as living beyond your means. This is what the Town of South Berwick has been doing.
Blaming the revenue drop on lack of economic development is a truly UN informed argument.
Losing $700,000 in savings combined with two clerical errors worth $204,000 amount to $904,000. If we had the $904,000 back then we could play the usual “timing” game with the budget and things would go along relatively smoothly.
April 24th, 2008 at 10:57 am
And yet, in spite of this situation, the Town Council feels it is necessary to preserve raises and full benefits packages for employees, and complete a property purchase at an inflated price.
Clearly, NO lessons have been learned.
April 24th, 2008 at 9:13 pm
As young adults with young children it is horribly hard to sustain more taxes in this State and this Town. Don’t get me wrong, we love living here, but the State Taxes are bad enough! Now our Property Taxes are increasing again? It’s bad enough a couple years ago the Town came in and reassessed our home 3 years after it was built! The reassessment was ridiculous! We must be assessed at 100 % of bank values now. So now we are going down another road of higher taxes? Bottle Taxes, Income Taxes, Excise Taxes, Sales Tax! What happened to Freedom? What happened to people taking care of themselves? What is with the astronomical TAXES we are paying? My Wife and I are under 30 and have two young kids and it’s very hard to get taxed this hard. Where is our hard earned money going?
April 24th, 2008 at 9:38 pm
To Young Family: As was stated by Ms. Roberge at the April 14th open forum on the budget, the only recourse tax payers have at this point is to show up June 2 at the town meeting and vote to not accept the budget. If the budget is passed at the town meeting, then our tax rate will increase 18%. It will be up to the town citizens to decide.
April 25th, 2008 at 7:09 am
My fellow citizens: You need to realize that this proposed 18% increase is a combination of 7% town budget increase and 11% SAD 35 budget increase. In other words if the Town held there budget to a ZERO increase we would still have a 11% percent tax increase due to the SAD 35 budget. Make sure you are barking up all trees-more people need to get involved with the SAD 35 budget process. Much of this tax increase is due to more loss of State funding of the SAD 35 budget ( as is the case every year). We as citizens are sending more of our hard earned money (taxes) to Augusta every year but are getting less back to fund our schools every year-leaving us as a community to fund more and more of the school budget on our own.
Until the people in Augusta wake up and realize that we need to be friendly towards creating business and industry (not depending solely on tourism) to create jobs for your citizens this great ship of Maine will continue to sink-and when it sinks it will take along with it all the towns and it citizens with it. It’s all about jobs people. With no jobs there is no money-no money for people to buy goods and services from local merchants which in turn leads to lower sales taxes, lower income taxes and burgeoning welfare/social costs leading to budget deficits. What is going to keep the young people here? With out opportunity for young high school/college grads most are moving out of state creating a brain drain and now Maine has one of the oldest average populations in the country which leads to other great distinction-THE HIGHEST TAX BURDEN IN THE COUNTRY.
As a lifelong resident of this town and state I would encourage everyone to get involved both on the state and local level-get your friends and neighbors involved, get out and vote!
April 25th, 2008 at 7:55 am
Amen JCH.
April 25th, 2008 at 8:25 am
Unfortunately the problem is not simply taxes and the data about business incentives and disincentives needs to be looked at more carefully if the state and our town really want to get jobs here. First the statement that Maine has the highest business taxes in the country is not true for all types of businesses and the comparisons with other states including NH do not take into account many of the fees that are not collected as taxes. Also taxes are not the only things that are barriers to businesses coming to Maine.
From the report Understanding Maine’s Tax Burden and Business Climate
“That which influences business investment and location decisions is the quantity and quality of public services (such as schools, roads and highways, sewer systems, recreational facilities, higher education and health services). Furthermore, it is a well-trained labor force and high-quality public services that are of equal or greater importance [as opposed to taxes] to businesses.”
Also Maine has other obstacles to business investment, including “lack of proximity to major markets; the need to maintain an extensive, mostly rural road network; a cold climate which requires energy costs higher than in warmer climates; workers’ compensation costs; and lack of “thick” labor markets in some industries.”
If Maine and South Berwick really want to attract businesses and jobs we have to look at the whole picture–we need to figure out what we need to invest in and what we need to cut back on in an intelligent way otherwise we may cut off our nose to spite our face.
April 25th, 2008 at 8:26 am
I believe the council has met since the last April 14 budget hearing. I have heard that they did alot more cuts and added concepts of bonding for capital improvements programs. Since the town website is not up to date as far as the budget changes I cannot confirm this but I have a hunch the council has brought the tax rate to less of an increase. Maybe going from an 18% increase to a 15% increase.
If the Town of South Berwick has to vote on LD1 cap issues
the public will have a more informed vote if they understand the legal difference between these two words:
EXCEED or INCREASE.
If the Town votes to EXCEED the LD1 limit
then the public is voting to allow the town to go over the LD1 limit for
that one budget year.
If the Town votes to INCREASE the LD1 limit
then the public is voting to allow the town to override the the LD1
formula and establish a new higher base for the LD1 formula to work
from in all the years forward.
Here is a description I found from the Maine Townsman, March 2005
“If the municipality’s property tax levy limit is $500,000, and the voters approve “exceeding” the limit by $50,000 in order to rebuild the town office destroyed by a fire, when the town begins to calculate its property tax levy limit for the following year, the levy limit upon which that calculation is based will be $500,000, not the actual commitment of $550,000. If the town meeting, instead, voted to “increase” the levy limit to $550,000 —the starting point upon which the subseequent year’s calculation would be based is the increased limit of $550,000.
April 25th, 2008 at 10:43 am
JCH - You are preaching to the choir here. The State of Maine continues to pass legislation which discourages economic development. Just look at the latest bills that were passed and reported in the Fosters. We get more like California every year with these overly restrictive regulations.
April 26th, 2008 at 6:39 am
Molly,
With all due respect I stated that Maine has the highest tax burden of all the 50 states (that is a well known fact). Business taxes and the costs to do business in this state are another dire subject which I won’t get into on this website. Owning 2 businesses in this state for the past 17 years I am fully aware of the costs to do business here and the disheartening business environment created up in Augusta.