2017-05-12 / Letters

Why a 3.5 percent tax increase is too high

To the editor:

The likely impact of Scarborough’s fiscal 2018 budget became much more clear following the joint town/school finance committee meeting on May 4.

Unless the full council rejects the finance committee’s recommendation, the budget will produce a tax rate (or mil rate) increase of 3.5 percent, moderately missing the council’s stated goal of a 3 percent increase.

While some taxpayers may be inclined to shrug their shoulders and accept this increase, there are several reasons why that would be precisely the wrong reaction.

First, consider that a modest 3.5 percent increase each year produces a five-year increase of 18.8 percent. Therefore a home valued at $300,000, and a tax bill of $4,944 in fiscal 2018 climbs to $5,872 in 2023.

Second, to arrive at the 3.5 percent increase, the budget preparers used $2.1 million of reserves or fund balance, monies built up in past years Without this action, the actual tax increase would have been about 7 percent.

While using reserves is not necessarily a bad thing, there was no meaningful public discussion of this critical issue. The imprudent use of reserves this year could easily result in unacceptably large tax rate increases in future years.

Finally, included in the 3.5 percent overall tax rate increase is a 6.9 percent increase in taxpayer funding of the schools.

The only reason the overall increase is as low as 3.5 percent is that taxpayer funding of the municipal budget is increasing by a mere 0.3 percent.

Indeed, if the amount of taxpayer money provided to the schools were, say, a still high but more reasonable 4 percent, the overall tax rate increase would be about 1.6 percent rather than 3.5 percent and Scarborough taxpayers could get a much needed break in the relentless increases they have been facing.

At the June 13 school budget referendum, residents will vote to approve or reject school funding of $42.5 million, an increase of 6.9 percent from this year’s level. This is the one and only budget where voters have an opportunity to influence their tax rate.

Please use that opportunity wisely. For more information, visit www.SMARTaxes.com.

Larry Hartwell

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