The city of Caribou is facing a dilemma: make deep cuts to its municipal budget to offset higher county and school appropriations, or maintain services and push property taxes higher on an aging population already feeling the impact of an affordability crisis hitting households across Maine.
The situation presents a “critical financial challenge,” City Manager Penny Thompson told the City Council Monday night.
“Something has got to change,” Thompson said. “What I hear from people is they can’t take many more increases here.”
Without cuts, the city’s mill rate could jump as many as three mills this year, a councilor estimated, pushing the rate to 25. On a $100,000 home, that means what was a $2,200 tax bill in 2025 would be a $2,500 bill this fall.
Caribou is part of the two-community RSU 39 and makes up a vast majority of the school district’s local funding. The district’s budget — approved at referendum last week — is more than $1.5 million higher than the previous year, totaling roughly $26 million.
Around $700,000 of that increase is set to fall on Caribou taxpayers, half of which will appear on tax bills this fall because the city and district work on different fiscal years.
Taxpayers will also be strapped with an additional $75,000 this year to cover their portion of the Aroostook County budget, which has more than doubled to $1.26 million since 2022.
The city council has yet to vote on its municipal budget, which, as it stands, is projected to raise taxes by just over $700,000.
To freeze the mill rate at 22, the council would have to cut more than $1.1 million.
“These are not minor adjustments,” Thompson said. “We would have to cut programs, services, staff positions, capital projects, because we’re already halfway through the year.”
The council Monday night offered differing options on how to move forward.
“I’ll be the bad guy. I think that we don’t cut our services. We do it every single year. We nickel and dime and we ask everybody to take things off the essential services to this community that make up for primarily one organization’s tax bill,” Councilor Tamara Lovewell said, referring to the RSU 39 budget.
Second-term Councilor Dan Bagley, who has heavily scrutinized the municipal budget in workshops and meetings, argued the opposite.
“We have to live within our means, and we currently are just on a path that’s going to end in disaster one way or another,” Bagley said. “My personal preference is to preserve our capital investments, the longer term stuff, and we need to cut services and personnel, that’s the only way we’re going to get the savings we’re looking for.”
As one cut, Caribou Mayor Courtney Boma suggested moving displays from the city-owned Nylander Museum of Natural History and selling the building, though that’s likely not possible to accomplish before this year’s tax rate is set.
“I don’t know that it’s getting a lot of use,” Boma said.
Councilor Paul Watson agreed that doing so could save the city money, but took a wider view on the budget issues, arguing that the city has for too long used stopgap measures to keep taxes down.
“Until we come to grips with the fact that we need to come up with a true plan, not a year-to-year hope and prayer, we’re not going to move forward,” he said.
In a more drastic suggestion, Watson proposed that it might be time for Caribou to consider leaving its regional school unit, a process that has to begin as a citizen’s initiative and requires nearly two dozen steps to complete.
Doing so could allow the council to take back control of the school budget under a municipal school district as used in Portland, Lewiston and Bangor, among other Maine cities.
“If you’re sitting at home and you’re tired of your taxes going up, you can’t come back to the same set of people saying ‘fix all of our problems,’ when that problem does not realistically reside with them,” Watson said.
Under the city’s charter, the council has to set a tax rate by June 30. It has another meeting scheduled for June 29.
