ROCKLAND — As the city council grapples with requests for additional staff to maintain public safety and recreation services, there are fears the city’s tax burden could worsen.
Frequent criticisms from residents include that the city spends too much; the school district spends too much; and that tax-exempt nonprofit organizations do not pay taxes.
But how does Rockland’s property tax compare to other communities? And what is behind this level of taxation?
The Maine Bureau of Revenue Services compiles a list of “total value tax rates” each year. These rates are often not the same as the tax rates used by municipalities to collect property taxes. Instead, the total value rate is calculated as if each municipality assessed its property at exactly 100% of the value.
The state released its most recent list of total value tax rates earlier this year — based on the amount of property taxes charged by a municipality in 2020 and the state’s 2022 assessment of these communities.
Rockland’s full value rate was determined at $22.29. This is the 17th highest rate in Maine. A year earlier, Rockland had the 15th highest.
County seats such as Rockland generally have higher than average tax rates because they provide more services and have many more people in the community than their population would need. There are more demands for services such as sewage treatment, road maintenance and public safety than the population of 7,172 people would normally require. The number of people in the town is increasing dramatically since the town is the retail and employment center of the region.
The state average for total value tax rates is $14.10. The highest rate is East Millinocket at $38.72. Bangor fare is $21.33, Brewer $21.60, Augusta $19.31, Belfast $20.18, Bath $21.29, Portland $15.59 and Ellsworth $17.52.
Rockland has the highest full value rate in Knox County, though Thomaston is close behind at $20.94.
The city sent bills totaling $19.9 million last fall. Of this amount, 55% ($10,867,000) went to Regional School Unit 13. Another 5% ($907,000) went to Knox County. The remaining 40% ($8.1 million) went to the municipal government.
The city projects taxes will increase by $316 this year for someone whose home is valued at $200,000 due to increases in these three government budgets.
Rockland City Council will conduct a preliminary vote on the city budget Monday evening with a final vote scheduled for Monday, June 27.
RSU 13 will hold its district budget meeting on Tuesday evening, May 24, at 6 p.m. in the auditorium at Oceanside High School. Registered voters from the five district communities can attend and vote on the budget proposed by the Council. Additions or reductions may be made by majority vote of those present. Rockland would pay an additional $302,900, a 2.8% increase if the budget is approved as recommended.
Knox County’s approved budget will require an additional $24,000 in taxes from Rockland. The 2022 county budget covers services such as the sheriff’s patrol and the jail.
Tax exempt properties
One of the most frequent criticisms voiced by residents is that the large number of nonprofits that do not pay property taxes plays a large role in the city’s above-average tax rate.
The amount of tax-exempt properties in Rockland totals $280 million covering 233 parcels. The overwhelming amount of tax-exempt property, however, is owned by government, including federal, state, county, city, and schools. For example, the Rockland Breakwater, owned by the US Coast Guard, is valued at $77 million.
About $50 million of tax-exempt properties are owned by private, nonprofit organizations such as nonprofit museums, health care organizations, churches, and social service agencies. If all were taxed, it would generate an additional $1.1 million in tax revenue for Rockland. This would reduce the city’s tax rate by about 5%.
State law exempts nonprofits from property tax. City Council, during its deliberations on the proposed 2022-2023 budget, asked the city administration to send notices to non-profit organizations requesting voluntary contributions in lieu of taxes.
But for-profit businesses also benefit from state laws and tax exemptions. The state allows manufacturers to dispose of professional equipment exempt from property tax. In Rockland, for example, international company DuPont Nutrition USA is allowed to exempt $15.7 million of its equipment from property tax, saving it $355,000 that would otherwise have gone into tax coffers. from the city.
Fisher Engineering snow plow manufacturer’s parent company, Douglas Dynamics, also gets an exemption for some of its equipment, saving the company more than $300,000.
The public school funding formula is designed to distribute aid to communities based not only on the number of students, but also on which districts are considered poor. The state, however, uses property assessments to determine a community’s wealth. The most valued coastal communities therefore receive less state aid.
RSU 13 officials have repeatedly pointed out that if the state’s education formula takes into account a community’s median income, the district would receive millions in additional aid, lowering the property tax rate. in communities across the district, including Rockland.
RSU 13 is expected to receive nearly $7.1 million in state aid in 2022-23, an increase of about $1.2 million.
The proposed budget for RSU 13 for 2022-2023 is $35.3 million, representing an increase in expenditure of 6.8% ($2,272,100). Nearly $2 million of the $2.27 million increase is due to increases in wages and benefits that are negotiated in employment contracts. Another $200,000 of the increase is attributable to higher energy costs.
However, additional revenue will limit the necessary property tax increases for communities to a 3.3% increase.
While RSU 13 has seen an increase, other districts with similar enrollment are receiving significantly more state assistance. RSU 71, which serves the Belfast area, is set to receive more than $9.1 million in state aid, despite having fewer students.
Without additional state assistance, the only way for the district to reduce tax liability would be to downsize. An attempt by a few board members to consider increasing class sizes by not filling vacancies was rejected by the school board. The administration and majority of board members said increasing class sizes as the district continues to deal with the impact of COVID-19 and the previous loss of instruction time would hurt students. .
The total municipal expenditure is proposed at $15,545,000, an increase of 7% ($1,076,000) over the approved budget for 2021-2022.
More than half of the budget goes to the three largest departments – Utilities (which includes the operation of solid waste facilities), Fire/Emergency Medical Services and Police. Nearly another $1.4 million is being used to pay down debt previously approved by voters. And almost another $700,000 goes to funding utilities such as fire hydrant rentals.
Proposed increases include adding another three-person shift for the fire department and an addition to the police department. The proposals are made to retain public safety personnel in the chaotic and competitive job market. Energy costs are another driver for the increase in the municipal budget.
Councilors expressed their support for the public safety demands and we will know more when the Council votes on May 23.
Knox County sees 15 more cases of COVID-19, CDC reports Saturday