2017-04-07 / Front Page

Tax bills set to rise 5.8%

Median residential bill up $243
By Wm. Duke Harrington Staff Writer

KENNEBUNK — If there is any angst in Kennebunk over the growth of local property tax bills, it was not evident at the public’s one chance to push back on increased public spending.

Only one person, school board member Lionel Menard, spoke at a March 28 public hearing on the town’s proposed $12.84 million budget for the coming fiscal year, to start July 1 — and his comments were largely limited to clarifying questions asked about the presentation made by town finance director Joel Downs.

Still, there were two notes of caution, coming from Downs himself, and from Ed Karytko, the board of selectmen’s self-professed fiscal hawk.

According to Downs, the proposed gross operating budget for the town is up $427,778 (3.5 percent), while debt service is up $199,057 (1.63), for a total spending hike of $625,835 (5.13 percent). However, after factoring in a 9.1 percent increase in revenue — including an expected $200,000 jump in vehicle excise tax collections — the need from taxation will come to $8.37 million. That’s up $253,335 (3.16 percent) from the current budget.

However, at the annual town meeting referendum June 13, voters will be faced with a series of four warrant article questions asking them to authorize a total of $5.31 million in new borrowing.

On the docket are $2.69 million in renovations to the highway garage and transfer station on Sea Road, $1.85 million in road paving and drainage work and $770,000 in vehicle purchases, including a new fire engine and a plow truck.

“This is the important part,” Downs told selectmen at the March 28 hearing. “I can’t stress this more strongly, that embedded in this budget is new debt totaling about $5.3 million. That will probably hit us in the fiscal year 2018-2019 timeframe.”

Also due to hit tax bills that same budget year will be payments on $2.57 million in borrowing approved by voters at the June 2016 town meeting, for paving work, an ambulance and two rec. department buses.

According to Downs, if voters OK all of the new bonds, the 2018-2019 budget will come with payments on a total of $7.88 million in new debt already baked into the cake.

“That will increase the mil rate by roughly 25 cents per $1,000 [of property valuation]. So, just something to keep in mind,” he said.

What concerned Karytko was the total hit to tax bills, when rolling Kennebunk’s share of RSU 21’s proposed $45.9 million budget, along with the town’s share of the York County operating budget.

The county tax is not yet finalized, but Karytko and Town Manager Mike Pardue said the impact will likely be an additional 2 cents on the local tax rate.

Spending in RSU 21 is up $2.8 million (6.5 percent) over the current year, while the local tax assessment to support public education will come in at $39.33 million — up 8.36 percent, district-wide.

Based on how the RSU 21 budget is divided through the cost-sharing agreement approved by the three towns, the overall increase translates to a 5.22 percent rise in Kennebunk tax bills, adding 83 cents per $100,000 of value.

With all three budgets (town, school and county) combined, the local tax rate is set to increase from $15.90 per $1,000 of assessed value, to $16.87.

Of that, the lion’s share ($12.39 — or, 73.4 percent) will go to the schools, with $3.77 funneled to town hall and 71 cents to the York County offices in Alfred.

For the owner of the median single-family home in Kennebunk, assessed at $250,000, that will mean a new property tax bill of $4,218 — an increase of $243.

Although the calculation works out slightly different for the town and the school, one nickel on the mil rate currently works out to about $100,000 in taxation.

That’s how Down’s said he calculates the 25-cent increase he’s predicting for the 2018-2019 budget year, which will add another $62.50 to the property tax on the median home that year.

According to RSU 21 business administrator Bruce “Rudy” Rudolph, 2018-2019 will be the peak year for annual payments on the $56.5 million school renovation bond approved by voters in 2015.

The budget voters are scheduled to weigh in on June 13 has a $1.33 increase in the payments on those bonds. That will increase another $738,563 in the 2017-2018 budget, to a total of $4.63 million before annual payments level out and start to decline each year over the life of the loan.

All new debt incurred after 2013 is divided about the three towns of RSU 21 according to total state valuation. That means Kennebunk gets about 49.3 percent of the bill. Using the nickel math provided by Downs, Kennebunk’s $364,111 share of the new debt payments for the 2019 fiscal year will equate to about 18.2 cents on the tax rate.

That means a total of about 43 cents on the tax rate for the 2018-2019 budget, or roughly $108.

In essence, voters can go into the June 13 budget vote knowing that if they approve everything as presented, not only will they add $243 to the tax bill on the median home in 2017, their vote, along with borrowing previously agreed to, commits them to adding a minimum of $108 in 2018 as well

That would drive the median tax bill for 2018 to $4,326 — an increase of 8.8 percent over two years, and that before accounting for any increase in school or town operating budgets for the 2018-2019 fiscal year.

“So, we’re looking at $1 increase per $1,000 of value this year and probably at least $1 next year,” Karytko said. “I just wanted to put that on the table, so nobody is under any illusion that they are not going to be paying a lot of taxes. “From now until June, everyone in town really has to be aware of the impact this is going to have on each individual family. There should be no excuses of, ‘Well, I didn’t know.’ We all vote on the schools and it’s here, and we’re going to have to pay for it.”

However, if anyone else on the board shared Karytko’s concern, they did not say so, and the hearing ended without further comment.

There will be a second public hearing on the budget proposal on May 23. However, by that time, the draft will be set in stone with nothing selectmen can do to change it. They are scheduled to sign the town meeting warrant May 9, while absentee ballots for the June 13 vote will be available starting May 12.

On the school side, the district budget meeting, at which voters will get to weigh in on 11 budget articles, will be held on May 16 at Kennebunk Elementary School.

Voters go to the polls in their respective towns for the annual budget validation referendum on June 13.

Staff Writer Duke Harrington can be reached at news@kennebunkpost.com.

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