Denmark tax rate jumps this fiscal year
By Dawn De Busk
DENMARK — It would not be an unusual thing — in this day and age — to learn about your town’s tax rate through Facebook.
In the Town of Denmark, most people had already seen their tax bill when a post appeared on the town’s Facebook page explaining why an increase had happened.
The tax rate has increased from $9.10 during the 2015–16 fiscal year to $11.25 for this fiscal year, according to Denmark Town Manager Christopher Loughlin.
“We are (a town of) about 1,200 or 1,300 residents. Everyone in town saw their tax bill go up 25 percent,” he said. “Those with the homesteader exemption saw it go up less.”
The Facebook post began, “Property owners by now should have received their tax bills. Many are wondering why there has been such an increase.”
“In recent years, the town has voted to take much of its Unassigned Fund Balance to keep taxes down. That meant that taxpayers enjoyed a very low tax rate over time,” according to the post dated Aug. 31.
“We have now reached a point where there is no unassigned fund balance available to keep the tax rate down for the upcoming year,” the post said.
Loughlin explained the fiscal strategy.
“What was happening over time is: To keep taxes down, we used the Unassigned Fund Balance to offset the tax rate. Over the last four years, it average $420,000 a year.”
“So, when it came to this year, what we had left was only that much,” he said, confirming there was about $400,000 remaining in the unassigned fund. Using a portion of the undesignated fund balance is something towns do to keep taxes “artificially low,” he said.
Loughlin’s recommendation to the Denmark Budget Committee “was not touching the surplus and building that back up,” he said. The town needs “to allow it to build back up over time. We are not going to get there in one year. It will take several years, to get it back up there,” he said.
“This is probably the biggest increase that Denmark taxpayers will see in the foreseeable future,” he said.
Unfortunately, the jump in the tax rate does not reflect the budget committee’s work to keep the town’s budget low.
There was only a 1.2 percent increase in the municipal budget, Loughlin said.
“The (town) assessor recommends the mil rate, and the selectmen either agree with it or not. The assessor gives them a range. He recommended $11.25,” he said.
Compared to other towns in Maine, a tax rate in the $11 range is fairly good, he said.
As was mentioned in the Facebook post, Loughlin said the School Administrative District No. 72 added to the costs for taxpayers in Denmark. There was the expansion project at the Molly Ockett Middle School, he said.
“We are below a certain mil rate, so we ended up paying for our share (of the construction costs.) Brownfield and Fryeburg are paying higher taxes. Towns like Lovell and Denmark are paying their share,” Loughlin said.
The Facebook post summed up other reasons for the mil rate increase.
“Other factors include a large increase in the county tax and the school budget,” the post said. “However, the biggest portion of the increase is due to the fact that we must pay through taxation what has been paid through the use of the unassigned fund balance in recent years.”