Council approves decrease in Star City mil rate

Kathy McCarty, Special to The County
18 years ago

    PRESQUE ISLE, Maine – Taxpayers in the Star City will see a drop in their property taxes – albeit a small drop – following City Council’s unanimous vote Monday, July 9, to authorize the use of $600,000 from the Undesignated Funds balance to help reduce the mil rate to 26.15, a fraction lower than last year’s figure.
   “Last year’s mil rate was 26.2 percent, not a big difference but still a decrease,” said City Manager Tom Stevens, explaining the  reasons for the drop.
“It’s not a significant decrease but a decrease nonetheless. In order for last year’s decrease the Council had to approve the use of $525,000 from the Undesignated Funds account. This year we were able to take $600,000. The reasons for the difference is last year we had a surplus of $2.6 million, while this year our surplus was up to $2.9 million,” said Stevens.
Stevens said the biggest reason for the increase in surplus was while expenses at the end of last year were right on target,  there were more revenues than estimated, which added up to a surplus.
“The city’s long-term goal should be to use less from surplus, but we were able to use more this year because of the increased revenues,” said Stevens.
Stevens explained the increases came from various areas, including county taxes which were up about $7,500, with the majority coming from the city itself.
“The county figure was a minor player and not significant. The real increase came from the city to the tune of around $260,000. We also saw some benefit from the legislature focusing attention on ramping up funding for K-12 education. We also saw some growth in our valuation, but not enough to cover all of the increase. Consequently, we took a little more from surplus to make figures come out closer to last year’s,” said Stevens.
Adding to the good news, according to Stevens, is the fact services remain at about the same level as last year.
“It’s good news at all levels of government – county, city and school. It’s safe to say we’re all providing the same level of services for 2007 as a year ago. If everyone’s providing the same level (of service) and the mil rate came out the same, given the inflation faced at all levels, I think we all did quite well,” said the city manager.
With that in mind, Stevens said it’s positive news.
“Looking at the future, the city is stable in the level of services provided with no major increases. K-12 funding looks positive for Presque Isle, despite consolidation and other issues,” said Stevens. “I’m optimistic for what the future will bring economically, including new business ventures for Presque Isle.”
According to Stevens, most but not all property owners will see a slight reduction in their property taxes.
“Because the tax rate went down a bit doesn’t mean everyone will see a decrease. The city used to certify properties at 91 percent but that’s dropped to 89 percent this year, which will impact Homestead and veterans’ exemptions, for example. That’s why the Council chose to use the funds to keep the mil rate down, to assist folks with such exemptions,” said Stevens. “Generally speaking, a person with Homestead or veteran’s exemption will see a very slight increase on their tax bill; those without the exemption will see a very slight decrease.”
Lona LaFrancis, the city’s tax assessor told the Council that translated to a minimal increase on their taxes.
“A Homestead Exemption is estimated to change $37, with the veteran’s exemption up $51,” said LaFrancis. “We have approximately 2,061 properties that claim the Homestead Exemption.”
“That’s one of the reasons we’re recommending taking the $600,000 to bring the mil rate down a bit to help those with exemptions,” commented Stevens.
Stevens said the shift would benefit the business community somewhat.
“Commercial growth in the past year is up considerably, with the addition of Lowe’s and MMG’s expansion. That growth was over $8.9 million in a year’s time. With Lowe’s, MMG come added jobs to the area – another spinoff benefit,” said Stevens, noting that the downtown area has seen improvements since the first of the year with the announcement of plans for the Braden Theater, a new restaurant in the works and the opening of a women’s boutique.
By next year, Stevens was optimistic additional properties would be added to the tax roll.
“There’s been some interest expressed in the development of the Cunningham property. The Industrial Council is handling that. That’s property that wasn’t historically on the tax roll so there’s potential to add it. The armory is now for sale. That site has been tax exempt so there are prospects there to add it to our tax base,” said Stevens, noting that both properties are prime pieces of real estate, especially the armory with its prominent location along U.S. Route 1.
Council Chairman Walt Elish agreed the Cunningham site being added to the tax base would be a plus for the city.
“The Cunningham property will be coming on the market relatively soon with some interest on it already. We’ll see increased revenue from development on that and other city properties,” said Elish.
Councilors deliberated for nearly an hour, discussing the matter at length before voting to support the use of funds from the Undesignated Funds account to hold the tax rate down.
“If we take $600,000 out, we’re looking at 5/10ths of a percent mil decrease. That’s better than an increase,” said Councilman Ron McPherson.