January 14

Waterville officials discuss potential loss of state revenue sharing money

City, school officials warned that if the money keeps going down, the city could lose $1.7m of the state money this year.

By Amy Calder acalder@centralmaine.com
Staff Writer

WATERVILLE — The potential loss of state revenue sharing was very much on the minds of school and city officials Tuesday night as they met for the first time this year to discuss upcoming budget issues.

City Finance Director Chuck Calkins said the city has seen a loss of revenue sharing over the last few years and if further reduction occurs, Waterville could lose $1.7 million in the state money this year.

“The way things are looking now, it could get even worse for next year,” he said.

Calkins discussed city goals and reviewed the city’s tax rate history, use of surplus and funding of capital improvements.

He said the law requires the state share 5 percent of income and sales tax revenue with cities and towns and for the current year, that would equal $140 million in payments to municipalities. In fiscal year 2013, the state reduced that amount to $95 million and in fiscal year 2014, revenue sharing was further reduced to $65 million.

If a legislative committee does not find $40 million in additional savings, revenue sharing may be reduced to $25 million, and Waterville would lose $1.7 million, he said. That amount would represent a tax increase of $2 per $1,000 worth of valuation.

Waterville’s tax rate in 2005 was $27.40, the same as it is now. After 2005, the tax rate dropped several years and then started increasing.

Council Chairman Fred Stubbert, D-Ward 1, noted that property in Waterville is assessed at less than 100 percent valuation.

Mayor Karen Heck said surrounding municipalities are assessed at 100 percent, but Waterville provides services not provided in, say, Fairfield, such as garbage collection.

Heck said mayors are trying to make legislators and those who vote for them understand that the state is passing costs on to taxpayers, which is the least fair way to assess taxes.

“I just want to say one thing about revenue sharing,” she said. “Revenue sharing is money the state collects from sales tax and income tax and the state law says the state will give us back 5.1 percent of the money they collect to repay us for the kinds of things we take on. The kinds of things the state is doing and making money on are generated by service center like us. We’re where the economy is really humming.”

The state promises muncipalities money, but does not deliver, according to Heck.

“It’s really a broken promise, one. And two, it’s passing on their responsibilities for providing services to taxpayers who own property, and it’s the least fair way to assess taxes.”

Eric Haley, superintendent for Alternative Organizational Structure 92, which includes Waterville, Winslow and Vassalboro, said the percentage of increase in Waterville school budgets over eight years since the $16..8 million budget of 2006 is 20.25 percent, or an average of 2.53 percent per year. State subsidy went up 18.78 percent, or 2.35 percent per year, and local taxes increased 13.07 percent, or an average of 1.63 percent per year. School revenues increased 66.04 percent over eight years, or an annual average of 8.25 percent, he said.

Schools get 61 percent of the cost for education from the state, which is more than the required 55 percent, he added, but he said he has been vocal about the state’s formula for distribution of that money.

“We lost $643,000 last year from monies we deserved through Title I, based on free and reduced student count (students eligible to receive free and reduced lunches) in the school system,” he said. “The state’s taking federal dollars we deserve and subtracting them from general purpose aid and saying, ‘You don’t need that. (The state) says there’s only so much money for education. I understand, but the way it’s set up, Falmouth and Cape Elizabeth are benefiting from Title I monies by subtracting from our budget.”

City and school officials discussed a list of proposed capital improvement projects that would require bonding next year. City Manager Michael Roy said the list, devised by Roy, Calkins and department heads, are suggestions for discussion. The list includes airport runway construction, road construction, public works equipment, property revaluation, an Interstate 95 interchange at Trafton Road, fire rescue vehicle, parks and recreation equipment, municipal pool repair, Airport Road extension, Water/Spring street pedestrian improvements and final repairs to Waterville Senior High School. The total for the projects is estimated at $5.3 million, and Roy said there will be changes made to the list.

Stubbert said he wants to see construction of an airport terminal on the list.

“It looks like we can get FAA (Federal Aviation Administration) to pay for most of the terminal,” he said.

Amy Calder — 861-9247 acalder@centralmaine.com Twitter: @AmyCalder17

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