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By Greenville Town Manager John Simko After ten years' efforts, a small group of property tax cap advocates organized by Carol Palesky of Topsham have succeeded in collecting the required number of signatures on a citizen's initiative petition to have this question placed on the referendum ballot during the November 2004 general election. The question asks voters if they want this tax cap to be implemented. The implementing language has two significant parts: the first calls for a roll back of property values to 1996 levels. This rollback has been found to be unconstitutional by the Maine Supreme Court, and the proponents of the measure have agreed that this portion of the bill should be severed and removed from the bill. The second portion calls for a cap on property taxes not to exceed 1% of total property value, or a ten mil cap on municipalities which certify their values to 100% of actual value. Essentially, this means municipalities are prevented from exceeding ten mils as a tax rate, after adjusting actual values to 100% (this percentage is the ratio between actual value as calculated by the State and individual assessed value, as calculated by each municipality). If implemented, this would mean each municipality must calculate its total value, take 1% of this amount, and this becomes the MAXIMUM amount of money that each municipality may raise for expenses. From this maximum, the county tax and any SAD assessment must be satisfied first. In Greenville, as part of School Union #60, the school funds are grouped in this the Town. For projection purposes, the same percentage of the total tax dollars used for the commitment in the last year were used for the school (70%) and the municipality (21.6%). In Greenville, this calculation appears as follows: Total value (adjusted to 100% from 94%): $172,238,730 Will this proposal be immediately implemented if it passes in November 2004? No. The Maine constitution requires that if a citizen initiative passes by a majority during a general election, the Maine Legislature is required to take up this measure at their next session. There is no requirement by the Legislature to adopt and to implement this measure, only to take it up. Twice before, the Maine Legislature has rejected citizen initiatives which have been passed and presented to them (most recently with the Racino bill). It is likely, however, that if this passes, the legislature will feel compelled to enact at least a version of this bill which retains a cap of some sort. If this occurs, my understanding is that it would be implemented within 90 days of the closure of the first session of the legislature, so this would most likely not impact FY04-05 fiscal year, but would affect FY05-06. The Greenville community, as a geographically isolated service center, would see a dramatic change and reduction in the public services it offers. Through calculation of the maximum amount of funds available for the Town and the school budgets, it is projected at 21.6% of the remaining funds would be available for use by the municipal government, and 70% of the remaining funds would be available for use by the schools. These percentages could and likely would change through the budget process for FY2005-2006. These percentages result in the following MAXIMUM tax commitment amounts per category: Municipality: $ 316,108.28 55% cut from current budget The town and the school do each get to utilize any off-setting revenues, such as revenue sharing, general purpose aid for education, fees, etc., to fund its respective operations. The Town may be forced to implement additional or higher fees to restore portions of the budget which would be cut. Specific financial impacts are detailed in the attached budget spreadsheets. Highlights of these cuts by sector, especially in how they impact current levels of service and employment, are listed below: Schools: The Greenville School Committee and Superintendent Steve Pound are working out a detailed analysis of what would happen to the current educational program. On the surface, it appears that the high school and the middle school would close, and perhaps the elementary school as well. It is unclear how much additional money, if any, will be allowed from the State for educational purposes as a result of the passage of the June 2004 MMA initiative for educational funding (which has yet to be addressed by the Maine Legislature). If all of the schools closed, approximately 50 full-time and 20 part-time or seasonal positions would be lost. Students would be bussed to either MSAD #4 in Guilford or further south to other school districts willing and able to receive these students. If the elementary school were to remain open, it is estimated grades K-3 would be taught in Greenville and higher grades bussed elsewhere. Approximately 12 full-time positions would be retained. The now-empty buildings would likely be returned to the Town's possession, and would require heating and bare-bones maintenance to keep them useable for any other purposes. The estimated cost of keeping these three main buildings serviced in a “mothballed” status is roughly $97,180.74, which would have to come from either reserve accounts for the Town (e.g., public works); remaining off-setting revenues from the schools (e.g., unappropriated surplus); or the Town's current fund balance. It should be noted that it is unknown just what it would cost to ship ALL of the Greenville students to the nearest school district, or if the nearest school district would be able to handle the influx. If a further school had to be considered, it might be that even more local property taxes would be required to meet the mandate of K-12 education. Charles A. Dean Memorial Hospital and Nursing Home: The only direct impact this tax cap would have on the hospital would be the loss of the $12,500 contribution made annually to the ambulance service. These funds are generally used for upgrade and replacement costs for the ambulances themselves. The loss of this revenue would likely delay or even curtail planned replacements of these rigs. The hospital would have an even more severe indirect impact due to the projected loss of the school and the downsizing of other community services. The hospital currently struggles with the successful recruitment of professionals to this community due to our geographic isolation. It may become even more difficult to recruit such professionals if there is no local school system into which these professionals may send their children. Current professionals in the hospital, and throughout the community, would likely reconsider their choice to live here, and re-located to be closer to their children's schools. This could have a hugely detrimentally impact to the hospital as professionals leave and replacements cannot be found. Also, the outmigration of families will likely reduce the total annual volume of hospital visits, having a detrimental financial impact to the hospital. It is quite possible that the local hospital would have to consider eliminating various services, or possibly close all together. CA Dean Hospital is the largest employer in Greenville, with approximately 150 full-time equivalent positions. Chamber of Commerce: The Chamber would lose its $10,000 contribution from the Town, which would adversely impact its operation. The Executive Director for the Chamber has supplied some information, which is attached. In summary, the Chamber would diminish its hours of operation, lay-off two part-time positions, and diminish its web site presence. The Executive Director estimates that these actions would result in the loss of as much as 50% of the contacts the Chamber currently makes with actual or potential visitors to the region via walk-ins, email inquiries, or telephone inquiries. Conservative estimates would place this total loss of contacts at between 10,000 and 12,000 contacts each year. Town of Greenville – General Government: Town office functions cease one day per week (probably Fridays), and all full-time employees take a 20% pay-cut. The Code Enforcement officer cuts one day out of the office. Stipends for elected Board members are lost, as is travel expense reimbursements for all employees. All training is curtailed. No funding is allowed for the appeals board. All advertising expenses are curtailed (free venues would have to be utilized exclusively). Internet service and website maintenance would be eliminated. The revaluation reserve and all assessing functions would be preserved and enhanced if possible: the town's total assessed value would have to be updated annually to maximize the influx of property tax revenue to maintain even limited services. The public would lose 20% of the services offered by the Town Office. Five employees would be cut by to 80% time, equivalent to the loss of one full time position. Town of Greenville – Public Safety: The fire department would have its salaries line cut, resulting in the lessening of discretionary meetings, work sessions, and training for which firefighters are paid. New equipment and equipment repairs would be rolled back, in hopes of the pending federal grant paying for new equipment (e.g., turnout gear, radios, etc.). Funding for the first responder service would be curtailed. Funds for the capital reserve for the fire station would be eliminated. Fire Chief's discretionary salary and mileage reimbursement would be eliminated. Reserve funds would be left in tact, except for the amount necessary to match the federal grant should it arrive (these funds would otherwise come from the capital budget). The police department would only cover approximately 72 hours per week, or the equivalent of six day shifts. The county sheriff would have to respond to calls from Dover-Foxcroft the remainder of the time. Both full time officers would be reduced to 32 hours per week. The department would cease investigations, DARE program functions, and most all pro-active community policing functions (e.g., MANPAC and Citizen Appreciation Day). Extra coverage for special events would become the primary responsibility of the sheriff's department. As a less-than-full-time department, the GPD would no longer be eligible for certain state and federal funds. Coverage of Beaver Cove for call-outs would likely cease. The equivalent of 2/5th of a full-time position would lost from the police department. Under rules from the Public Utilities Commission (PUC), the hydrant rental may not be reduced unless we discontinue some hydrants in the system. This would bear investigation. The appropriation for street lights would decrease by 1/3, darkening 1/3 of the Town now illuminated by streetlights. Funds for the emergency radio system capital fund would be eliminated. Town of Greenville – Public Works: All three public works employees would be reduced to 32 hours per week. If snow fell on the scheduled day off, another day off would be authorized. The amount of salt, sand and magnesium chloride purchased would be diminished, these resources literally spread thin in their application. The paving program would be curtailed: state funds for road improvement would be used for road maintenance. No gravel road improvements with geotextile fabric would be possible. Most street sweeping would be curtailed. Personal safety equipment allowances would be eliminated. The road ditching program would be curtailed. The road crew would become a general maintenance crew only. The equivalent of 1.5 full time positions would be eliminated (including seasonal help). Town of Greenville – Health & Welfare: All donations to service groups would be eliminated, including the $12,500 contribution to CA Dean Ambulance. Only the statutorily required general assistance account would remain in this category. Town of Greenville – Recreation: The Town's contributions to recreations programs would be eliminated all together. Facilities such as the skating rink, Skateboard Park, tennis courts, basketball court, and Red Cross beach would be closed unless additional funds would be found to ensure general maintenance and liability insurance coverage. The rebuild of the Junction Wharf would be curtailed and the wharf itself would be given to the State of Maine, which would be forced to either improve it or close it. An estimated 10 part-time seasonal jobs would be lost as a result. Town of Greenville – Cemetery and Memorial: All funds for the cemetery would be curtailed. The cemetery corporation would be required to raise fees to pay for maintenance. Town of Greenville – Airport: Maintenance of the airport would fall back to only the bare requirements set forth by the grant assurances we have with the MDOT and FAA. The arrivals building would not be built or maintained, and the main runway would be designed by remain unbuilt due to the lack of funds. Town of Greenville – Solid Waste & Recycling: The landfill and the recycling center would be closed one additional day per week (from three to two days open). If a per-bag or higher landfill sticker fee system were implemented, these days may be restored. All curbside collections and dumpsters would cease operation. The equivalent of one full-time position would be loss as a result. Town of Greenville – Employee Benefits: in an effort to prevent 100% turnover of current employees, a clause would be added to the personnel Handbook to allow current full-time employees who accept a 20% pay cut and schedule of work to continue to receive all benefits. New employees hired would not have such a privilege. The lines for unemployment insurance, worker's compensation insurance, and the health pool would all be reduced. Town of Greenville – Library: $10,000 would be cut from this account to reflect a similar reduction in scope of work as seen in other departments. This would likely reduce some part-time employment and also reduce the number of hours of operation. Town of Greenville – Economic Development, Chamber of Commerce, Special Events, and Miscellaneous: The Town's economic development program would essentially cease to exist. There would be no contribution to the Chamber of Commerce, to the Christmas Lights fund, or the Fourth of July Fireworks. Total Projected Job Loss: It is estimated that these impacts to all town departments, the library, the Chamber of Commerce, and the summer recreation program would result in the loss of 6.4 Full-time equivalent positions, plus 10 seasonal part-time positions. Also, the school would lose between 38 and 45 full-time employees and between 10 and 20 part-time seasonal employees. Total FTE job loss for every sector is estimated at 45 with at least 20 seasonal part-time positions lost. Impact on Town Revenues: Due to the decrease in certain budgets, the Town is expected to lose $18,995 from the current budget. Additional Funds Necessary In addition to these cuts, $44,217.95 would be either cut or taken from surplus or reserve accounts to keep our budget under the tax cap and/or to compensate for losses in revenue. The current reserve accounts and surplus would be appropriate sources for this necessary revenue. The closure of some or all of the schools in the Greenville system would not curtail the need to maintain them, at least in a “mothballed” state. The estimated cost of maintaining the High School, Elementary School, and Gymnasium for twelve months in such a condition is $97,180.74, which would also likely come from existing reserve accounts or from surplus until a final use for the buildings could be identified. Conclusion If implemented, this tax cap initiative would make the Greenville community a place where current residents do not want to live. There would be a significant out-migration of families with school-aged children, and the likely closure of the hospital and other major employers. Many stores and businesses would be negatively impacted by the loss of residents (who are often frequent customers), as well as tourists who would not be given as much information as they get now to plan their travel. The entire Moosehead Lake Region would suffer a decline in commerce, in population, and in employment. Greenville would no longer be a desired place to visit, to work, or to live. Property tax relief is needed, but not through this proposal, which is extremely poor policy. I recommend the Town work toward the defeat of this bill, and encourage more reasonable property tax relief measures in the future.
Respectfully Submitted; John Simko |