On April 6, Town Manager David Cole announced his budget for 2017-2018. Excluding the School Budget, the proposed gross budget is $14,051,668. This is an increase of 3.2% from the current budget of $13,618,860. The estimated non-property tax revenue is $6,465,750, or a 4.3% increase. The funds needed from property taxes are $7,485,832, or an increase of 2.3%. The estimated property tax rate needed to support this budget, based on a local assessed value of $1,588,086,688, is $4.71. This is an increase of 7 cents, or 1.6%.
The Town is obligated to collect the property tax for Cumberland County, and that tax is part of the Town’s annual property tax bill. The property tax for Cumberland County increased by $69,123 or 6.2%. Over the last five years (from the 2011-12 fiscal year to the 2016-17 year), County taxes have increased 31.37% compared to the rate of inflation as measured by the CPI-U from December 2011 to December 2016 of 6.98%.
Some of this increase is the result of Gorham growing faster than other communities in Cumberland County. Gorham’s share of the County property tax for 2011-12 was 3.52% and grew to 3.77% for 2016-17; however, even taking that into consideration, the increase in the County tax has been significant. This year’s increase of 6.2% is also higher than the rate of inflation.
Cole pointed out several other factors affecting the budget for 2017-2018:
The Town Council voted to make a three-year commitment to a trial program that would extend METRO Bus service to Gorham Village and with the anticipation that this service would be able to complement the separate bus service between the USM Gorham and Portland campuses. The estimated annual cost to Gorham is $162,719, but the annual cost to Gorham during the three-year trial period is $33,000.
Included in the Debt Service-Principle account is the first principle payment of $65,000 for the new debt on the two Fire & Rescue vehicles. As a reminder, the first interest payment was in the 2016-17 budget.
As a result of the Federal Clean Water Act, the Town of Gorham, along with 14 other communities in the Portland area, have been obligated to obtain a permit from the Maine Department of Environmental Protection to discharge (allow) stormwater to flow into nearby water bodies like Tannery Brook. This permit, first obtained in 2003, must be renewed every five years, and is due in 2018. Each time the permit has been renewed, the Town has been required to comply with additional regulations. In anticipation that the cost of complying with the mandated program will continue to increase, a separate Stormwater Compliance account was established to help track costs in the future.
Gorham has operated a Fire & Rescue Department with a combination of professional employees, while relying on the Call Company to fill-in when manpower was needed during a response to an emergency. The complexity of training and amount of time required for Call Company employees to train has increased over the years, along with the number of calls for emergency help. This is partly the result of being a growing community. More people living in Gorham means more calls for emergency assistance. Over time, this has resulted in a reduction in the number of Call Company employees who respond to calls.
Because our Fire Department has been very innovative over the years by adopting a program like the student live-in program and working cooperatively with other communities, this helped to slow the erosion of support from the Call Company. However, even with this extensive effort, the Fire & Rescue Department’s annual operating costs have continued to increase, and the Town may need to rely on more expensive full-time employees, or reduce the level of response time and service provided to the community.
As reported last year, there continue to be issues with the State of Maine’s Municipal Revenue Sharing Program, enacted in 1972. The original purpose of this program was to assist towns after the state-mandated programs took a sizable portion of town-collected property tax money and eliminated a significant amount of property tax revenue from commercial properties.
According to Cole, when the State began to have serious financial problems in 2006, it started using money designated for Revenue Sharing to solve its own problems. Last year, the State took approximately 59% of the funds that should have been available to municipalities.
By law, the Town of Gorham should be receiving approximately $1.9 million in Revenue Sharing funds. If the State honored the law, the property tax rate in Gorham would have been approximately 75 cents lower. That amounts to an additional cost of $187.50 for property valued at $250,000. Currently, the Town is budgeting $750,000 in State Revenue Sharing funds.
The Town Council will meet again on May 2 to review and approve the budget, thus sending it on for a town vote.