EAST MILLINOCKET, Maine — Town leaders continue to make budget cuts, but taxpayers will likely face a large property tax increase unless Great Northern Paper Co. LLC pays its overdue property taxes, officials said Wednesday.
The East Millinocket School Committee has so far made about $152,000 in cuts to its proposed $4.2 million budget for the 2014-15 fiscal year. Committee members might make more cuts after meeting with the Board of Selectmen in two weeks, but still appear to be short $111,078 of balancing an expected $261,078 increase in school costs caused by a drop in state aid, officials said.
Even with the cuts, Selectman Mark Marston said, the town faces a tax-rate increase from $21.93 per thousand of valuation in the 2013-14 fiscal year, which ended June 30, to about $27. That increase means that owners of $50,000 properties would pay $1,350 in property taxes this year instead of $1,096.
“It was substantial,” Marston said Wednesday of committee members’ recent attempt at cutting the school budget. “They did a good job but [despite their cuts] there still is a significant increase in school costs to taxpayers.”
If Great Northern, the town’s largest single taxpayer, continues to leave its taxes unpaid, the mill rate would likely increase to $37, possibly $38, officials have said. A $37 mill rate would leave owners of $50,000 homes paying $1,850 this year, or $754 more than they paid in 2013-14.
Great Northern is months behind in its $657,900 property tax payment for the 2013-14 fiscal year. The paper mill, which makes newsprint, closed in January, and 212 of its 256 workers were laid off on Feb. 6. Company representatives have indicated that they hope to restart the mill in the fall and are working diligently to pay their creditors and tax bills.
With the layoffs, an increasingly elderly population and declining school and overall populations, selectmen have said that they doubt that East Millinocket can withstand such a steep tax increase. The town’s population has dropped from 2,557 in the 1970 census to 1,723 in 2010.
Population predictions compiled by state officials before the February layoffs and available at maine.gov show East Millinocket’s population falling to 1,617 next year, to 1,525 in 2020 and to 1,430 by 2025.
The debate developing now is who cuts next. School Committee Chairman Dan Byron, who met with selectmen on Monday, said he was “concerned” that the town government budget hasn’t been cut further since taxpayers voted 246-145 to reject the schools’ $4.2 million budget during a validation vote on June 11.
“It appears that they [selectmen] are going to want us to cut more, but we have made our cuts and I haven’t heard anything on the town side,” Byron said Wednesday. “I haven’t heard any town cuts being made.”
Marston said he believed that selectmen have made all the cuts they can without significantly damaging or ending basic town services such as police coverage and road maintenance.
“One thing that Dan did say [during Monday’s meeting] was that you can’t expect the school to make all the cuts,” Marston said. “And as far as I am concerned, we can’t cut any more and maintain services.”
Selectmen laid off four town workers, including two police officers, in March in their $2.2 million budget in response to Great Northern Paper’s tax delinquency. Declines in population and state aid and fixed-cost increases were blamed for the budget increase.
Selectmen also said they support Great Northern. They opted not to pursue a lien against the company for the overdue taxes and transferred $700,000 to cover GNP’s tax non-payment. This conflicted with the advice given by the town’s assessor, who warned that the transfer from the town reserve account would threaten the town’s financial security.
The school committee cut an elementary school teacher and a half-time high school guidance counselor from their budget prior to its validation-vote rejection.
Byron and Superintendent Quenten Clark listed the cuts that represent the $152,000 reduction to the school budget. They include the $41,000 elimination of a second elementary school teacher’s position; a $50,000 cut to the special education budget for transportation costs; the elimination of the girls and boys tennis teams at Schenck High School, saving $5,454; and a reduction from full- to part-time of a technology support services position, which saves $13,050, they said.
Another $3,500 will be saved with the reduction in the schools’ elementary and secondary professional services accounts. Cuts to the technology hardware and software accounts will save $17,300. About $3,500 was saved with a cut to an unemployment benefits account, Byron said.
Selectmen have questioned whether they are required to cut the town’s budget further. About 80 residents voted by a healthy margin to pass the town budget during a town meeting on June 3.
Clark expressed frustration at GNP’s non-payment of taxes.
“The No. 1 topic is the non-payment. If they could be relied upon to pay their taxes we probably wouldn’t have done this,” Clark said.
People who pit selectmen against school board members by saying the cuts are politically, and not economically, motivated are wrong, Clark said.
“There is great uncertainty in this town. This is not something the selectmen are making up. It is real. They have some real financial issues they are facing,” Clark said.
Town Administrative Assistant Shirley Tapley hopes to set a meeting between the committee and selectmen on July 21 to discuss the town’s finances, Byron said.