Mayor, there must be a mistake in my tax bill! Part 2, the expenditure side

October 31, 2012 | Capital expenditures, Democracy, Elderly, Housing, Local issues, Real estate taxes, Referendums, Saco, Tax credits

By:David A. Smith

 

[Continued from yesterday’s Part 1.]

 

Yesterday’s post, using a factual and incurious article in the Saco Sun-Chronicle (October 3, 2012), brought us citizen Mary Pelkey of Saco, Maine, who decided to raise a ruckus about Saco’s recent property tax increase, the largely inevitable consequence of both macroeconomic forces (cutbacks in federal and state support for localities) and microeconomic choices (building of a new ‘destination’ train station, and rejection of the sale of a redundant fire station for conversion into elderly housing).

 

Plenty of revenues, plenty of food!

 

Yet local taxes pay for only local services, so an increase in taxes must imply an increase in spending, which the City of Saco web site explained (badly) this way:

 

The 6.2% increase in the municipal budget is accounted for in an operating expense increase of 1.9% in fire, police and public works, and a 4.3% increase in the capital improvement budget, which was $165,000 in FY12 and is now $1.5 million.

[The sentence is mangled: they’re saying that 31% of the bump (1.9% out of the 6.2% increase total) is due to operating expenses, and 69% of it (4.3% out of the 6.2%) is due to the ninefold increase in the capital budget. – Ed.]

 

Thirty seconds’ search revealed the capital budget in its full glory:

 

That’s a lot of paving: and what are these PACTs?

 

At this point my sympathies swing to Ms. Pelkey, though not for the school budget, but rather for the huge increase in capital spending at a time when the residents are hurting.  None of these expenditures was so important they had to be done last year, and now they all rush in at once?  This has the whiff of a city council deciding that, if anything is moving forward on the capital front, everything might as well move forward on the capital front.

 

Sure, have a side of the fingerling potatoes, and another of the broccoli with Hollandaise sauce – no problem!

 

Everybody else is paying for this, right?

 

The battle will be opened on the school budget, which has already been declared a battleground:

 

The proposed budget for Regional School Unit 23 has already been rejected twice by voters this year and residents will meet next week on the new $43.2 million spending package now slated to go to referendum on Nov. 6.

 

There is something wonderfully compact about this tussle, because the linkages are so direct.  What force other than their own pocketbooks would rouse the good people to Saco enough to challenge the school budget?  Conversely, what check on expanding would there be without the voters to stand up I town meeting and demand a reckoning that justifies the expenditure?

 

Local property taxes put people directly into their own government.

 

Pelkey has lived in Saco for the past three years and moved to town to be closer to her children and grandchildren. She’s a Maine native, coming from the northern part of the state originally.

 

For most of her professional career, Pelkey worked for the Corporation for National and Community Service, and while she’s never served in political office, she described herself as “politically active” and “very interested in politics.”

 

Now she has even more reason to be so.

 

“(The council) is not representing the people in town,” she said, citing the recent debate about the redevelopment of the former fire station in downtown. Earlier this summer, the council voted not to sell the building for senior housing, despite having a roomful of people speak out in favor of the proposal by Housing Initiatives of New England.

 

There’s a twist in the story!

 

Come on baby, now twist the story

 

Though the other side is not directly cited in the article, the city council was almost certainly wrong on this issue.  The old fire station is a redundant structure; the days of multiple fire stations disappeared when horse-drawn water pumpers gave way to automotive fire engines.

 

You’ll need a lot of stations for those

 

What is to be done with the empty structure?  If left empty, it is a struldbrug building that produces no property taxes (being owned by the city), no revenue from rental, and no use to the community.  Conversion into elderly housing delivers a community benefit (places for older people to live close to their children and grandchildren), brings in capital investment (and taps Federal historic tax credits, as well as Low Income Housing Tax Credits), and adds to the tax rolls.  HINE seems an entirely suitable non-profit developer with a good track record – and the chance to grasp the credits may be a perishable opportunity.

 

In short, the council blundered.  Fortunately, they realized it:

 

Then last month [September, 2012 – Ed.], following a high-profile rally that drew a large number of supporters –

 

Rallying for affordable housing: wonders never cease.

 

Nice building: what can you use it for?

 

  the council reversed direction and agreed to the sale.

 

Good for them. 

 

Pelkey understands that hardly anybody showed up to speak at the public hearing for the municipal budget this past spring, but said that “a lot of people don’t feel comfortable going to meetings and speaking up.”

 

With her new endeavor, Pelkey hopes to change that.

 

You may not get what you ask for, but if you never ask, you will certainly not get it

 

 “Maybe we will start to see that change. Another purpose of (the meeting on Wednesday) is to get people to take an active role in the community,” she said.

 

Kate Smith once sense that the best exercise for weight loss was pushing away from the table.  Perhaps the good people of Saco are now ready for that regimen.

 

Will the taxes lower the Boom?

 

The new $43.2 million spending package now slated to go to referendum on Nov. 6.

 

Election Day.  The micro always implies the macro.

 

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Comments

Comment from Saco Resident
Date: November 10, 2012, 10:20 am

The Saco city council is nothing but a bunch of selfish incompetent crooks, who turn vicious on the very people they were elected to protect. They never read our country’s constitution and taxation without representation is what they’re all about. Our founding fathers fought and died to protect us from these crooks. Richard Michaud: you are a disgrace to America and what it stands for.