WATERVILLE — Mayor Nick Isgro on Wednesday vetoed the $38 million municipal and school budget for 2016-17 that the City Council approved the day before, saying residents are being driven from their homes because of the city’s high tax rate.
Isgro said the financial picture is not about fault or blame and that Council Chairman John O’Donnell, D-Ward 5, and others have done a responsible and respectful job with the budget.
Document: Waterville mayor's budget veto letter
“That said, at the very heart of this matter lies a deeply moral issue that moves me more than any other argument,” Isgro wrote. “Simply put, there are elderly retirees as well as other individuals and working middle-class families that are being priced out of their homes. In some cases, these are homes that have been in families for decades.”
Isgro calls for city officials to rework the budget to produce one that is more feasible. His written veto message was addressed to councilors, City Manager Michael Roy and City Clerk Patti Dubois.
“Let’s get back to work, make some very painful and tough decisions and rework our school and municipal budget to bring it in line with those whom we serve,” he wrote.
It is the second year in a row Isgro has vetoed the budget the day after its passage by the City Council. Last year, he vetoed the $37.4 million budget, because he disagreed with putting an unexpected $58,000 in revenue into surplus.
With Wednesday’s veto, Isgro also cited a city resident who emailed him Wednesday, writing: “I have no plans on moving as we will make things work, but it will significantly hamper my ability to provide for my family as part of the money I designate for upkeep of my property, food, schooling, clothing, transportation, utilities will have to now go towards this increase in tax.”
While the city’s tax rate decreases by 24 cents under the new budget — from $27.80 to $27.56 per $1,000 worth of valuation — some people’s taxes will increase significantly because of the city’s recently concluded property revaluation. Other people’s taxes will decrease and some will stay about the same under the revaluation.
City Clerk Patti Dubois said Wednesday that Isgro’s veto will go before the seven-member council on July 19. City Solicitor Bill Lee said councilors will first take a vote on the budget, as vetoed by the mayor.
“If five vote in favor, that is the end of it,” Lee said. “If fewer than five vote in favor of the budget, then it is open for amendments and passage again after amendments are made. The mayor can then veto again.”
Isgro told the council Tuesday night that his own property taxes are increasing by more than $1,000 because of the revaluation and a woman who contacted him earlier in the day said her taxes will increase by $2,500.
Councilor Sydney Mayhew, R-Ward 4, said he shares Isgro’s anger about the high tax rate and says the $38 million budget should be reworked. Mayhew said he learned his own property taxes are increasing by $1,300 and he has been receiving calls from residents who also are angry that their taxes are increasing significantly.
The revaluation, coupled with an already high tax rate, is causing a situation that is untenable for taxpayers, according to Mayhew.
“This is a double hit on residential taxpayers’ wallets,” he said. “This is like a horror show in some ways because taxpayers are up in arms, looking for someone to point fingers at. They’re looking for answers.”
HIGH TAX RATE
Waterville has among the highest property tax rates in the state, according to a state official.
David Heidrich Jr., director of communications for the state Department of Administrative and Financial Services, referred Wednesday to statistics from the Maine Revenue Services Property Tax Division that show municipal tax rates in Maine communities from 2008 to 2015. Accompanying that document is a “full value tax rates history” that contains the communities’ full value, or equalized tax rates, through 2014.
The 2014 equalized tax rate includes adjustments made for the homestead exemption program, business equipment tax exemption program and municipal tax increment financing, or TIF districts, according to Heidrich.
In 2015, Waterville’s tax rate was $27.80 per $1,000 worth of valuation, which put the tax rate fifth-highest of 496 communities in the state, according to Heidrich.
“With rates equalized statewide, Waterville has the 15th-highest property tax rate in the state at $23.02 per $1,000 of valuation,” Heidrich said.
The community with the highest property tax rate in 2015 was Pownal, at $35.75 per $1,000, he said. Pownal also is going through a property revaluation and the tax rate is expected to drop significantly when it is complete, he said. In 2015, Millinocket had the second-highest tax rate in the state at $29.99 per $1,000, followed by Grand Isle at $29.25; Milo at $28.70; Washburn at $28.50; Brunswick at $28.36; and then Waterville’s $27.80, he said.
“The interesting thing is when you equalize the tax rate, Pownal is nowhere near the top — it drops right off,” he said, adding that it becomes the 222nd highest tax rate in the state using that formula.
“Regardless of how you look at it, Waterville has a comparatively high property tax burden due to its large amount of tax-exempt property and the city’s spending priorities,” he said.
Colby College,for example, is classified as a nonprofit organization and is exempt from paying taxes to Waterville.
Augusta’s tax rate in 2015 was $19.40 per $1,000, the 108th-highest tax rate in the state; Bangor’s tax rate was $21.95, the 50th-highest; and Portland’s was $20.63, the 80th-highest; Biddeford, $19.47, the 106th-highest; and Kennebunkport, $7.63, the 456th-highest.
‘CRYING OUT FOR RELIEF’
Waterville residents received letters Tuesday from Vision Government Solutions Inc. informing them of their new property values and asking them to contact Vision to make appointments if they have questions about those new values. Residents will meet with Vision officials at City Hall starting July 11.
City Manager Michael Roy said if people have questions about the new values, meeting with Vision officials is important.
“Now is the time to ask questions about what they received for potential new value,” Roy said.
Isgro said after Tuesday’s meeting that he is not angry his property value increased with the revaluation, because if he ever sold his home, he would want it to have the higher value. However, he is angry that the city’s spending policies have caused the tax burden to increase, he said.
In his veto message, Isgro says that in the past year he has recognized the local food cupboard and sandwich program for their work and their needs have been staggering.
“If we talk about caring for our most vulnerable, then I urge you, take a stand for those voices crying out for relief from the heavy burden of city levies,” Isgro wrote in his veto message. “I understand it is difficult not to give the grease to the squeaky wheel but sometimes attention must be given to those parts which make no noise because they have come to a grinding halt. So it is with our elderly and middle-class families. We will hear from those who, like myself, may find the increasing tax burden difficult but will muddle through that we must keep funding our budget as-is.”
He says the real question is how many people the city is driving out of their homes and “how many potential families will never come here because our burden is one of the highest in the state.”
“The taxpayers are not an endless resource but are rather a well that is close to run dry. At some point those carrying the highest burden will no longer be able to carry water for those who have already run out.”
SPENDING MATTERS
Isgro says state revenue sharing to the city has decreased, the city has debt from $12 million it borrowed in the last few years for various projects and the city’s surplus fund has decreased.
“This is why the state of Maine noted in its denial of Waterville’s Business Friendly Community designation that we have ‘failed to address Waterville’s problem,’ referring to spending in relation to the city’s mill rate,” his message says.
Mayhew, the city councilor, said he ran for his council seat on a platform that touted limited spending, keeping essential services, funding meaningful programs and tax relief, and he supports Isgro’s bid to rework the budget to obtain a lower tax rate.
“I share the pain and I sympathize with others staring down a double-barrel shotgun of taxes that’s just bleeding us dry,” he said.
Councilor Steve Soule, D-Ward 1, said he supports Isgro and Mayhew’s contention that the budget needs to be cut more.
Soule voted against the proposed budget Tuesday night and said he just learned his own property taxes will increase by $1,100 under the reevaluation.
“I think it’s finally catching up to us and we need to change our ways,” Soule said Wednesday. “For too many years we’ve been spending more than we’re taking in and we can’t do that anymore.”
Soule said the city needs to accept the concept that it can spend only what it takes in. “I think we need to go through a little rough period before we can get out of this, just like in our own households,” he said.
Councilor Jackie Dupont, D-Ward 7, who also voted against the budget, could not be reached for comment Wednesday, nor could O’Donnell or councilors Nathaniel White, D-Ward 2, and Rosemary Winslow, D-Ward 3. Councilor Dana Bushee, D-Ward 6, was absent from Tuesday’s meeting as she said she would be away.
Amy Calder — 861-9247
Twitter: @AmyCalder17
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