‘Correction year’ forces higher taxes in Scarborough

SCARBOROUGH – Town Councilor Judith Roy may have made the most honest assessment of Scarborough’s proposed budget for the next fiscal year, presented March 21 by Town Manager Tom Hall.

“I choked a little,” she said.

That’s because gross spending is up 5.86 percent, to $64.2 million. Cumberland County taxes also are up 5 percent, to $2.06 million. On the town side, spending is up 1.69 percent to $23.02 million, while school spending is now pegged at $39.17 million, up a whopping 9.86 percent. Combined with shrinking revenue, these preliminary budgets mean Scarborough residents are staring down the barrel of a 10.86 percent increase in property taxes.

"We are, with a sense of urgency, moving to stop further deterioration of education quality at Scarborough schools," Superintendent George Entwistle III said during his March 15 presentation.

After estimated revenues are subtracted, Scarborough will need $51.78 million from taxpayers. That figure is up 11.29 percent from last year and will push the property tax rate, Hall said, to $14.44 per thousand dollars of property valuation – up $1.41 (10.872 percent).

Assuming a $15 million increase in property valuation, and a median property value of $300,00, the average taxpayer could expect to pay an extra $432, if nothing changes before the budgets are finalized.

However, the good news is that some things will change. At the very least, a planned restructuring of long-term debt, announced last week by Hall, could shave as much as $1.3 million off the $3.5 million hike in school spending. By paying off about $21 million in money borrowed at 4.33 percent interest with new bonds issued at 2.48 percent, Hall said Scarborough can absorb all payments on the $39.1 million Wentworth school project with zero impact to the tax rate.

“The bond sale is scheduled for April 18,” said Finance Director Ruth Porter. “So, by the time we finalize our budget, we will know what the actual savings are.”

Although the first payment on the Wentworth bond was expected to ring in at $1.3 million, Hall hedged on putting a dollar figure to impact on next year’s budget. The relief will be “significant” is all he would say.

Hall blamed the balance of the imminent tax hike largely on reduced revenues, totaling $409,475 on the town side and $1.18 million on the school side.

“The truth of the matter is, in the change in the distribution model to [state] revenue sharing, Scarborough is the single biggest loser,” said Hall, predicting a lost of $47,000. That particular change appears to have stalled in committee at the Legislature, meaning, Hall said, that “we may have side-stepped one bullet this year.”

“But that’s likely to be a challenge going forward,” said Hall. “The notion is that the wealthier the community, the higher its property values, the more it can afford locally.”

But if Scarborough residents are feeling wealthy, they are not being overly ostentatious about their wealth. Excise taxes, Hall said, have been budgeted at $65,000 less than last year, based on recent trends in car registration.

The lion’s share of the education loss comes from the expiration of a $1.13 million JOBS grant. In fact, the last three school budgets, Hall said, have been “plugged with artificial sources.” With the well now dry on temporary stimulus funds from the feds, Hall said 2013 will be a “correction year” for Scarborough taxpayers.

“This is not a new story,” he said. “We’ve known it’s coming. At the same time we’ve increased expenses we’re also seeing decreases revenues. That means a lot of this year needs to be picked up locally, or we need to choose to modify what our spending priorities are.”

The public will have several chances to sway town councilors on those priorities, primarily at a public hearing April 11 and a special workshop session on Saturday, April 25. That session, something new in Scarborough, will feature councilors and school board members sitting down together at one table.

“This will happen after the finance committee has completed its review and has its recommendations,” said Hall.

Things that could get kicked out of the budget either before or at that meeting include a $288,000 bathhouse at Higgins Beach. Although it promises to alleviate complaints from beachfront residents of public nudity (because surfers and beachgoers have no place to change) the bathhouse was pulled from the budget late in last year’s deliberations.

The budget also includes $165,500 for new boilers at town hall, where two of the five units installed in 1992 are now permanently offline. According to Councilor Judy Roy, who serves as liaison to the town energy committee, a local resident has lined up investors willing to pay for construction of a tri-generation machine that would generate both heat and electricity from the natural gas line into town hall. Dunstan Corner improvements ($400,000), road paving ($483,000) and Fogg Road repairs ($230,000) help contribute to $1.6 million in planned capital improvement projects.

In the school department, Entwitle said he is trying to restore cuts made in recent years as growing budgets did not keep pace with perceived needs, even in the face of millions in federal assistance. In the last two years, the school department cut 42 full-time equivalent jobs, although many of the cuts amounted to the elimination of vacant slots.

"You can't make that kind of a reduction and expect no impact," he said.

The double-digit spending hike, said Entwistle, is designed to reverse what he called a  "pattern of under-funding.” Although $1.1 million of the spending hike will go to salary hikes agreed to be the school board’s negotiating team, Entwistle said about a third of the requested increase for next year is aimed at restoring foreign language classes at the elementary level and stimulating the district’s STEM (science, technology, engineering and math) curriculum.