Explanation of Special Town Meeting Vote

 

The Maine Legislature, as part of its tax reform package entitled “LD-1” has placed a limit on the amount of property tax that each municipality can raise for school, county and municipal taxes.  The article at the April 28, 2005 town meeting deals with the municipal spending limit. 

 

The 2004/2005 budget passed by the voters of Lamoine established the “base amount” from which the limit is calculated.  Because the town utilized surplus funds and revenues other than property taxes, the amount of property tax raised to fund the municipal portion of the budget was a negative number.  Based on the formula approved in LD-1, that base amount may be increased by a certain percentage each year, which means more of a negative number for property taxes. 

 

The calculation that would establish the base is as follows:

           

2004/05 Municipal Property Tax Commitment

$1,548,807.40

 

Less County Assessment

($93,276.09)

 

Less (Net) Education Budget

($1,504,046.17)

 

Less Property Tax Overlay

($12,550.37)

 

Net Municipal Property Tax Commitment

 

$-61,065.23

 

This increasing negative number would wipe out the town’s surplus very quickly. The budget approved at the March 9, 2005 town meeting will mean a small amount of property tax commitment ($134,872.51 minus whatever municipal revenue sharing estimate will be used, or less than 1-mill at present estimates) for the coming budget. 

 

If this “increase” is approved, this base would be adjusted upward for inflation and construction growth from this point forward.  The town meeting would be limited to that amount to fund the municipal portion of the budget.  There are provisions to allow the town to exceed the “cap” in the event of a catastrophic event.