Westbrook Voters Approve Budget
By a margin of nearly four to one, electors and property owners approved the 2017-’18 budget. The tally at the May 16 Town meeting was 96 votes in favor of the plan versus 25 against it.
The vote was taken by secret ballot after a short presentation on both the town and schools budgets followed by a question and answer session. In the town budget overview, Finance Director Donna Castracane proposed a new mill rate of 24.37, up 5.3 percent, to pay for the spending plan, given the revenue projections.
The adopted budget for town government, debt service and the Board of Education is $29,700,749, an increase of $295,340 over the current year which represents a one percent rise.
After the vote results were announced, the Board of Finance met to discuss and then set a new mill rate.
Finance board member George Pytlik voiced a view all BOF members present appeared to share.
“The town voted by more than three to one for this budget and this mill rate. I don’t like the [mill rate] number, but the town has accepted it,” said Pytlik.
Pytlik then moved to set the new mill rate at 24.37, an increase of 1.23 mills over the current year’s 23.14 mill rate. The vote was unanimous. No fund balance was applied to lower the rate.
BOF members shared a view that preservation of the town’s fund balance, now standing at 14 percent of the budget, was wise, given the uncertainty about the state budget.
The mill rate rose by more than one mill this year, even with spending up just one percent, because the value of the town’s Grand List of Taxable Property dropped by 2.7 percent. The Grand List decline is due to the outcome of the recent town-wide revaluation; the Grand List value is a key input to the mill rate calculation.
Taxpayers should not assume that the percentage increase in the town’s mill rate will equal the percentage increase in their tax bills. When town property values drop, a higher mill rate is needed to collect the same amount of property tax revenue as in the prior year.
To calculate a parcel’s new tax obligation, an owner starts with the post-revaluation property value. The assessed value is set by law at 70 percent of the property’s value.
Using the example of a house currently worth $350,000 on the market, its assessed value would be $245,000 (70 percent of $350,000). To determine the property taxes due, the owner divides the assessed value by 1,000 and then multiplies that number, in this example, $245, by the mill rate to calculate estimated property taxes.
Under last year’s 23.14 mill rate, annual taxes would be $5,699.30; under this year’s 24.37 mill rate, taxes would be $5,970.65, a increase of $271.35 or 4.76 percent. Given the decline in assessed values that resulted from the recent revaluation, however, a homeowner whose house was last year valued at $350,000 and who saw a 2.7 percent reduction in assessment (the townwide average) following revaluation will now, on an assessment of $238,385 (70 percent of $340,550), pay $5,809.44 in taxes, an annual increase of $110.14 or 1.93 percent.
This is the second year that the town’s Board of Selectmen decided to hold the annual budget vote in a town meeting format instead of in a town-wide referendum.