By Rick Wright

Staff Writer

South Portland taxpayers could face a property tax increase of 7.48 percent if City Manager Jim Gailey’s worst-case scenario comes true.

That’s a situation, however, that Gailey said is unlikely once the city’s budget is solidified. The council is only in favor of a small tax increase, he added.

With both the city and school system facing sharply declining revenues and rapidly increasing expenses, the city council and board of education met Monday to discuss budgets for fiscal year 2010-2011.

Gailey shared an estimate that projected a city budget deficit of $1,274,761. He estimated the city would need to increase its property tax levy by 7.48 percent next year to cover the shortfall. 

Superintendent of Schools Suzanne Godin presented a projected deficit of $2,085,796 to $2,295,588 for the 2010-2011 fiscal year budget.

Gailey was right about council attitude toward taxes: Most councilors demonstrated little appetite for an increase.

Mayor Tom Coward polled councilors regarding their positions on increasing taxes.  Councilors Tom Blake, Jim Hughes, and Rosemarie DeAngelis recommended no increase.

Councilor Patti Smith suggested a 0.5 percent increase. Councilor Maxine Beecher favored a 1.5 percent tax hike and the mayor said he preferred a 2.75 percent increase.

“What I’m hearing from citizens is, ‘Mr. Blake, I cannot afford a tax increase,’” Blake said.

He supported using money in the city and school undesignated fund accounts to balance the budgets. The two entities have a combined balance of $12.9 million.

“Let’s lean on our bank account this year and have a zero percent tax increase. We cannot continue to shift the burden to the taxpayers,” Blake said.

Councilor Linda Boudreau was hesitant about using surplus funds to plug holes in the two budgets.

 “We don’t want to decimate our city and our schools. We need to keep a reserve account,” Boudreau said.

Beecher agreed with Boudreau. 

“Don’t use the surplus,” Beecher said. “It would create too big a hole. Then you can’t catch up. I’d like to come in at a very low percent if possible because the citizens are suffering.”  

Board of Education Chairman Rick Carter said he wanted a tax increase or decrease to apply equally to both sides.

“It’s always a tricky situation. Ultimately, it’s the council’s decision,” Carter said. “As long as it’s fair and equitable, I can live with it.”

Godin asked the council to decide on a tax rate immediately so she and the board could start the process of finalizing next year’s budget.

“I’d rather know right now. Shoot for zero percent. Shoot for 1 percent. It’s going to get ugly,” she said. “We have cut positions across the board. We’re talking about decimating people.”

At the end of the two-hour meeting, Coward asked Gailey to resolve the tax increase issue based on the group’s discussion.

 “Your commission is to keep it as low as you can and try to keep the city running. We’re punting to you,” Coward said.

Both bodies agreed to try to meet again during the second week of February to reassess their respective budgets. The board and the council will write final budgets sometime between the last week of February and the first week of March.

Rick Wright can be reached at 282-4337, ext 237, or news@inthesentry.com.