Fort Kent prepares for bad news as revenue shortfalls loom

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29 January 2013

FORT KENT– With proposed state budget revenue shortfalls looming on the Fort Kent municipal budget's horizon, the budget committee presented the town council with municipal department requests at the town council meeting on Jan. 28.

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If the Legislature enacts the proposed state budget as written, the town faces between $350,000 and $630,000 in revenues of various types lost, depending on excise tax figures, which were unavailable in time for the meeting, said Fort Kent Town Manager Don Guimond.

In a letter he distributed to the town councilors prior to the council meeting, Guimond said, “The proposed state budget will reduce revenue sharing, excise tax collections, general assistance reimbursements, and personal property tax revenues. In addition reductions in education funding and the homestead exemption program will likely negatively impact property taxes as well.”

Because Fort Kent's yearly budget schedule is offset from the state budget schedule, Fort Kent residents are more likely to feel the greater impact from any loss in state revenues or funding next year, as opposed to this year. However, the town council's goal is to minimize the impact of those losses by spreading it out as much as possible, said Guimond.

The offset budget schedule will assist with this, he said, because the new state budget will go into effect only in July, while the town's new budget begins in January.

Other area towns, such as Madawaska and St. Agatha, as well as the SAD 27 budget, is on the same schedule as the state budget and therefore, those municipalities and organization will feel the full impact of the reductions in one year.

However, he reminded residents that whatever the impact the reductions have on the municipality, it will be reflected onto the school, and vice versa.

“We're all in this together,” he said. “It is one tax bill.”

He added, “With the kind of revenue adjustments being proposed, both the town and the school system will have to figure out a way to minimize the impact on the taxpayer.”

Guimond said the town is first going to “continue with the budget process as we have in the past.” The town budget committee members will “develop the budget through normal procedures and normal channels,” until legislators approve the state budget is approved.

Then they will determine the exact impact of the excise tax reductions and lastly continue “keeping an eye on the legislature,” he said.

“This is the start of the budget process,” said Guimond, referring to the budget approval procedure that culminates at a town meeting in the spring.

Other than the “unknown factor” in potential state budget impacts, he said the committee presented nothing that was a major surprise to the town council.