MADAWASKA, Maine — Faced with a potentially significant tax increase this year, Madawaska officials are holding a special town meeting on Oct. 1 to see if voters will agree to lessen the burden with $300,000 from the town’s undesignated fund.
Without this additional funding, the town could see an increase of over two mills this year. One mill represents the taxable amount per $1,000 worth of property.
The town set last year’s mill rate to 23.25. For a resident with a property worth $100,000, this would result in $2,325 in annual taxes.
In order to lessen the burden of going up by more than two mills this year, town officials agreed to hold the special meeting. The undesignated fund has a balance of $4,424,877 as of June 30 of last year. The additional $300,000 added to revenues would result in an increase of just over one and half mills to 24.75. For someone with a property worth $100,000, this would be an additional $150 in taxes over the previous year.
If approved at the special town meeting, the town hopes to commit taxes later in October.
When asked by residents why this year’s budget saw such a significant increase, Select Board Chairwoman Renee Deschaine said that much of it was due to inflation across the board and that every department was instructed to keep flat budgets. She said the town also had to cut paving projects because it could not afford to add them to the budget. Board member Sam Corey said that many of the town’s reserve accounts also saw cuts or no new funds added.
Town Manager David Daigle said that county taxes also increased by $188,000, health insurance increased by 9%, and salaries and benefits increased by roughly 4% and 5%. When questioned why the salaries increased by up to 5%, Daigle said this is a combination of Cost of Living Adjustment increases and an earned incentive program that provides increases to town employees based on the length of their careers, ranging from an additional .5% to an additional 2%.
Town officials also discussed different options for an overlay, which is an amount of money set aside in case the town needs to award tax abatements in the following year. While the town typically goes with an overlay around $200,000, the board this year agreed to set the overlay to $97,081.96.
The town’s $10.5 million expense budget was approved by residents approved earlier this year in June. This budget represented a $267,632 increase over the previous year, with the primary increases being due to salaries and benefits, including a 3% cost of living increase. The largest contribution to this year’s budget was $200,000 to the road projects reserve account, which previously only had just over $500.
The town also approved taking $600,000 out of the undesignated fund balance to offset tax increases and as part of a $1.15 million tax abatement payment to Twin Rivers Paper Co. voted on earlier this year. If the $300,000 is approved in October, a total of $900,000 will have been taken out of the fund this year.
Between this tax abatement and inflationary increases, Deschaine said situations like this are precisely what the undesignated fund is for, as it will help the town avoid a much larger tax increase.
The meeting is set for 6 p.m. on Oct. 1 and will take place at the Madawaska Middle/High School Cafeteria.
