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Towns presented with tax cap ordinances
RUMFORD/MEXICO -- With issues facing the paper mill, and the state and federal budgets, tax cap petitions have been presented before select boards in Rumford and Mexico.
Last week, the Rumford selectmen unanimously approved placing a proposed ordinance before voters in June that would initially cap municipal spending at $6.2 million. Meanwhile, last night, Mexico selectmen held a special meeting to decide whether to accept a tax ordinance capping the operating cost of the town to the amount of $2,726,731, which is a 10 percent decrease in the previous year's operating town cost.
In Rumford, the tax cap would include initiated article requests and all components of the municipal budget, excluding state, county and school assessments. The petition ordinance, submitted to the board following a Concerned Rumford Taxpayers Group meeting, originally sought to create an ordinance to cap the property tax rate at $17.50 per $1,000 of assessed valuation for each fiscal year, beginning July 1. The current tax rate is $24.25.
The petition also wanted a special town meeting called, deeming that a critical circumstance exists with a possible shutdown of the Rumford paper mill.
At a special board meeting on April 9, selectmen unanimously rejected calling a special town meeting. By a 4-0 vote, they decided the petition did not merit the "critical circumstance" required under town law.
Additionally, town attorney Jennifer Kreckel, in her letter to selectmen dated April 9, deemed the "tax cap" ordinance illegal.
However, last week, petition organizer Mark Belanger reintroduced the tax relief petition as a spending cap ordinance. He said the cap's revenue from taxes equals an $18.50 tax rate, with the new amount is based on the numbers received last week on the fixed town cost.
"We felt that $17.50 (tax) rate revenue was too aggressive. This $6.2 million municipal budget number will still give the Rumford taxpayers a 19 percent break on their taxes while also reaching our goal of a $1 million reduction in the Rumford mill's taxes," said Belanger, adding that all property and business owners will benefit from the spending cap.
The ordinance also allows for an annual increase of 2 percent with voter approval and has override provisions, should the town have an emergency.
Belanger said the spending cap would give all Rumford business and property owners a tax reduction, decrease the paper mill's tax bill by $1 million, depending on their valuation, create incentive for businesses to move to Rumford and nudge town officials to find more efficient ways of managing departments.
Board Chairman Greg Buccina said the town attorney must review it and the vote is subject to legal approval.
The board voted 3-0 to put it before voters in June.
In Mexico, resident Dr. Albert Aniel presented a petition on several sheets signed by 135 people, exceeding the required 108 signatures required.
He said this petition also asks that it "be locked in for a period of five years, so after five years, if we're back into booming times, maybe we can increase the operating budget again.”
The proposed cap figure of $2.76 million would be the amount of the town's operating cost of "three or four years ago."
“The Maine Revenue Services says Mexico has the highest mill rate in the entire state for the last four years, and a lot of people have seen their property taxes go up 50 percent in the last three years. Realtors will tell you that some properties are 30 percent overvalued. There are over $300,000 in unpaid taxes," he said.
“I honestly believe that our high property taxes are an economic disincentive for our area. I don't think it's going to encourage people to come here when they face the highest mill rate in the state, or encourage enterprises and businesses to move here. Why should they?” Aniel asked.
Selectman Byron Ouellette said he supported the idea, and a change had to be made.
“Here we are, a poor little town, trying to live up to the standards of the big town next to us. That's the way it's always been. We'll have to start thinking about reducing services somewhere, and this will just force us to do it and start living within our means,” he said.
Board Chairman Richie Philbrick suggested the board send the proposed tax ordinance to the town lawyer to make sure it's legal.
Selectman Peter Merrill said he sees the point of the proposed ordinance, but believes taxpayers should be showing up at board meetings and budget meetings to share their feelings.
Aniel told Merrill that many residents are elderly and feel intimidated by showing up at the meetings and speaking their mind.
Town Manager John Madigan said he would have the Maine Municipal Association look at the proposal, but he had a feeling that “they will say it's unconstitutional.”
“How can you pass an ordinance that restricts the selectmen, who are the chief executives of the town, from advising the citizens that, 'This is what we recommend you do?'” Madigan asked Aniel. “Otherwise, we can't take care of the town. You can't do that.
“The town can say 'yes' or 'no' every year, when we present them with the budget. It's the selectmen's job to present people with a budget that maintains the services they know we have, and if they don't want a certain service, they can vote 'no' every year, and that's the end of that service.”
Philbrick said the board should do justice to the petition by considering it. “They did collect the signatures, so we should give them the benefit of the doubt."
Aniel said if his ordinance is accepted by selectmen, he hopes it will be on the warrant for the annual town meeting in June. Town Clerk Penny Duguay said she has to have the ballots ready by May 11.