Caribou lowers tax rate by one mill

4 years ago

CARIBOU, Maine — Caribou City Council voted to reduce the mill rate by one during a July 15 meeting, setting the rate to 23.55 with no overlay.

The entire meeting lasted close to four hours, with more than an hour dedicated to discussion of the city’s mill rate.

City administrators recommended only a slight mill reduction to 24.36, saying that a full mill reduction would require additional revenues.

Mayor Mark Goughan said that when starting the budget process, he wanted to avoid using one-time money, to keep the expense and capital improvement budgets the same as the previous year and to not raise the mill rate.

Since then, the city has obtained roughly $477,000 in additional funds by increasing the rate for ambulance services to outside towns from $11.50 per capita to $100 per capita.

Goughan cited the controversy associated with this sudden increase, which drew criticism not only from outside communities but also from some Caribou residents. After finalizing the new ambulance contracts, Goughan said that he and other councilors determined that the best use of those funds would be to give them back to local taxpayers by reducing the mill rate by one.

He said the city provided a $500 bonus check to city employees amid the COVID-19 pandemic all while refraining from making significant cuts to city departments.

“We never laid anybody off and we never cut anybody’s pay,” said Goughan. “When the fire alarm rang, the men and women were there. When the police department bell rang, the men and women were there. And when it snowed, public works was there. Everything got done.”

He said that many within the city have benefited from the additional revenue.

“In my world,” he said, “everybody got something. “And now it’s time for the Caribou taxpayers. I’m hoping for a one mill reduction.”

Councilors Jody Smith and Hugh Kirkpatrick said they would support a one mill reduction, and Councilor Doug Morrell made a motion to approve it.

Councilor Joan Theriault said she was not in support of it, as it would lead to a shortfall in the budget.

Caribou City Manager Dennis Marker said that a one mill reduction would result in a shortfall of $408,750, and that in order to present a budget within the state’s formula, the city would need to show how they are going to make up for it — either by adding money from the city’s reserve fund or by cutting expenses.

“If you don’t make any adjustments to the expense budget, you’d have to say that you’re going to hedge the reserve fund by $408,750 just to have an overlay of zero,” Marker said.

Expenses could come in lower than anticipated and revenues could come in higher than zero, meaning that the entire $408,750 may not need to be spent from reserves, he said.

Theriault said that $408,750 was a lot of money to hedge, and instead proposed a half mill reduction.

“I’m afraid if we go this high we could look at a tax increase next year,” she said. “It would be hard to take away something we gave the year before because we gave too much. I think half a mill would be more reasonable, and that way, chances are we wouldn’t have to take it back in another year — but we don’t know what’s going to happen with the revenues. We don’t know how long COVID-19 is going to go; we may be into another year before people can go back to normal.”

Marker said that if expenses stay on course, the city could possibly make up the shortfall, but he said another winter is coming, road projects are taking place, and the city needs to look at fire station renovations.

Councilor Nicole Cote agreed with Theriault in reducing the mill by one half.

“If we go in too aggressively, it could result in an increased mill rate next year,” Cote said. “I understand that it’s important to give back to our taxpayers, but I also feel like we need to keep in mind the uncertainty that’s in our future.”

Goughan said that the city saw nearly $300,000 in unexpended expenses from last year’s budget, and reiterated his support for a one mill reduction.

“I’m adamant,” he said. “As one of seven — if you can’t do it this year, we’re never going to do it.”

Councilor Hugh Kirkpatrick said he was opposed to using money from the reserve fund to make up for the shortfall.

“Not only do the citizens deserve that mill rate reduction,” he said, “they deserve to keep that rainy day fund. They’ve earned that. What’s the point of it if we just commit it to the deficit? What’s the point of the work we put into creating it if we just use it as one-time money?”

Goughan suggested that the City Council spend more time discussing additional income from private sector investments, adding that this is a subject they “don’t even come close to talking about enough.”

“Nine years ago I was paying $9,000 in taxes,” said Goughan. “Nine years later I’m paying $17,000. I keep making money and I have to give it to the city and I don’t know where it goes.”

Morrell amended his motion to say that the reserve funds only be considered as a last resort.

The motion passed with councilors Cote and Theriault opposed.

Councilors then voted to establish July 20 as the date of commitment, Aug. 3 as the date that the taxes are due and payable, and for interest to begin accruing on Oct. 1, with Sept. 30 as the last day to pay before interest begins.

They also established 8 percent interest on delinquent taxes, and a rate of zero percent for overpayment or abatement of property taxes.

“I want to thank each and every one of you for openly expressing your opinions and I want to thank you for openly listening to other people’s opinions, whether you agreed with it or not; it’s the way it’s supposed to work. What we did tonight was let the public in on some of our feelings,” Goughan said.