CUMBERLAND – Mayor Jeff Mutter says he’ll need every last hour available to him leading up to a midnight deadline next Monday, May 8, to finalize a 2023-2024 budget.
The first payment on a voter-approved school bond is $3.1 million in interest alone, Mutter told The Breeze, but he’s not just resigning himself to the idea that the town will go to the full allowable 4 percent tax increase.
The Town Council, at an April 26 meeting, approved the unsynchronized tax levy for 2022-2023 (Cumberland has a unique system of setting rates at the end of the fiscal year). The “balloon” essentially stayed the same on the total amount of revenue to be collected, but the town’s revaluation shifted more of the burden to different people, he said.
Under state law, communities aren’t allowed to increase revenues using revaluations, but must “equalize” tax rates downward to make up the difference in increased tax values on homes.
The new residential rate approved last week is $11.62 per $1,000 of assessed value on residential real estate, meaning someone with a $300,000 home would pay $3,486 in annual taxes.
The tax levy overall went up by about 3 percent, on target for what officials were estimating last year. The new rate is down $3.37 from the current rate of $14.99, but that $14.99 would have risen to $15.43 without a revaluation and based on last year’s budget projections.
“If you kept that at $15.43, I think you’d have to leave town,” Mutter half-joked with the council last week.
An important point in this year’s budget process is that the town is moving away from using general fund surplus money to fill the budget from $3.43 million in 2018 to a proposed zero today.
Mutter told The Breeze that there are some options available to him as he prepares the next budget, which like the one just finalized won’t see rates set until next spring, but it’s a very challenging task ahead.
The school bond payment problem is one that officials also have to plan around for next year, added the mayor, with another significant payment due, then there will be some relief after that.
Mutter is proposing setting the tax collection rate for the first quarter at 49.5 percent, an important factor in the budget process. If the town hits 49.5 percent and everything else holds true, $700,000 of a $2.38 million revenue stabilization fund will be used.
Other funds available to buffer uncertainty from the collection rate and non-reoccurring expenses include $350,000 in a revaluation fund, $385,375 in an open space fund, $50,000 currently tabbed for investments in improving ADA accessibility around town, $1 million in debt service, and the $12 million fund balance, or town savings.
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