By Dawn De Busk
Staff Writer

CASCO — Casco’s elected officials heard that the best approach to adjusting the tax rate for 2011-12 was to exercise prudence.

Keep the mill rate as low as possible, while giving some budgetary breathing room when setting the overlay — since the town likely won’t collect every dollar of the property taxes owed.

Speaking on behalf of the Town Assessor John O’Donnell, his brother Michael O’Donnell told the Casco Board of Selectmen that the most feasible mill rate would be $12.25.

“With the expenditures you have for this year, you will see a tax rate increase. We are recommending a $1.40 increase from last year,” he said.

“This year, taxpayers are already looking at a big increase. The town budget went up, the school budget went up, and the county taxes went down — but not by much,” he said, adding, “Revenues are down.”

A mill rate of $12.25 per $1,000 valuation was set for the Town of Casco; therefore, a resident with a home valued at $200,000 will pay an annual property tax of $2,450, O’Donnell said.

In Casco, the town assessor sets the rate, and selectmen can select the overlay, he said. Essentially, the mill rate was decided after town meeting and the passage of the school budget; and the assessor’s job is to find a tax rate number that will bring in enough revenue to cover those costs.

“All the other numbers are predetermined. As assessors, we have to pick a rate that covers all your needs,” he said.

“By law, you are allowed to pick a rate that is five percent over that,” O’Donnell told the selectmen.

That is the overlay. In this case, three cents was added to the bare minimum of $12.22. Typically, the town rounds its tax rate to the nearest nickel. So, the mill rate of $12.25 creates an overlay — or a monetary safety net — of $23,000, he said.

“You are never going to collect 100 percent of your taxes. The overlay allows you to make up for that,” O’Donnell said.

During the 2010-11 budget year, which ended in June, the Mil rate was $10.85 per $1,000 of property valuation, he said.

“Given the nature of the hike in the mill rate, it seems prudent to have it as low as possible,” Town Manager David Morton said.

“We take our overlay and put it in our undesignated fund balance. If $23,000 isn’t enough, we have already prepared for that contingency at town meeting,” Morton said.

“Going with the lowest, practical amount of overlay is prudent at this juncture,” he said.

The board gave a show of hands to indicate it agreed with the assessor’s recommended mill rate.

Selectman Tracy Kimball said she would refrain from acknowledging the newly adjusted tax rate until she fully understood what the assessor was talking about.

“I need to know more,” Kimball said.

O’Donnell offered to swing by the town offices, and sit down with her at a convenient time in the future.