HomeMy WebLinkAbout2005-06-13 05-210 ORDERItem Mo. 05-210
Date: 06-13-05
Item/Subject ORDER, Authorizing the Fiscal Year 2006 Tax Levy to Increase Above the Property Tax
Levy Limit, As Calculated Under 30-A MRSA Section 5721-A, for the Purpose of Excluding Net New State
General Assistance Revenues from the Computation of the Tax Levy Limit and M Increase the Limit to
Recognize the Growth in Me City's Share of Expenditures in the General Assistance Program.
Responsible Department City Manager
Commentary: The State Legislature has recently enacted a system designed M limit the growth of
municipal tax levies t0 Me rate of growth of real personal income and Me growth in new real and
Personal property. As a part of the levy, limit calculation, municipalities are required M reduce their tax
levies in an amount equal ro any "net new state revenues," defined as Increases in revenues from Me
State over and above Me percentage growth allowed for Me property tax levy. The calculation of"net
new state revenues" is based on Me actual revenues recelved during FY04 (July 1, 2003 to June 30,
2004) compared to those projected to be received during FY05 (July 1, 2004 to June 30, 2005). We
Project that we will recelve $223,940 in State reimbursed General Assistance payments above the
allowable growth. The increase in the City's local mntribudon W Me General Assistance Program Is
estimated to also increase by $54,265.
The General Assistance Program Is a State program that is locally administered under Me rules and
regulationsof Me State. Parent increases in the cost of General Assistance refie¢ a growth in the
number of qualifying individuals and Me higher levels of rapport, particularly rent payments, required by
the State. The City, therefore, does not have Me ability to control expenditures made for this program.
To reduce the City's tax levy in recognition of Me additional reimbursements received from the State for
this program would require Me City to reduce and/or eliminate services provided to our residents.
It is apparent Mat the legislature, in drafting the "net new state revenue" tax levy reduction
requirements, did not take Me General Assistance Program into Consideration. Easetl on convenarti0ns
with our legislative delegation, it is doubtful Mat May intended Mis result.
The legislature has authorized municipalities W increase Meir property tax levy limit by majority vote of
the City Coundl. The attached Order would do so for Me purpose of recognizing the $223,940 In state
general assistance reimbursement In excess of the growth limit on new state revenues and $54,265, the
additional local share of General Assistance required from Me City.
Department Head
Manager's Documents; Recommend approval. O i 15 A AQ�Q•ur7/
City Manager �
Associated Information:
Budget Approval:
Finance DlreRor
iZ�
Introduced for •
X Passage
_ Firrt Reading Page _ of
Referral
35-210
P
"Signed to Comci or Gceme ]we 13. 2335
Mr Y
CITY OF BANGOR
(TITLE.) ORDER Authorizing the Fiscal Year 2006 Tax Levy to Increase Above Me
Property Tax Levy Limit, As Calculated Under 30-A MRSA Section 5721-A, for the
Purpose of Excluding Net New State General Assistance Revenues from the
Computation of the Tax Levy Limit and to Increase the Limit to Recognize the Growth in
the City's Share of Expenditures in the General Assistance Program.
WHEREAS, the State Legislature has enacted a system designed to limit the growth of
municipal tax levies to the rate of growth of real personal income and the
growth in new real and personal property; and
WHEREAS, as a part of the levy limit calculation, municipalities are required to reduce
their tax levies in an amount equal to any "net new state revenues,- defined
as increases in revenues from the State over and above the allowable
percentage growth allowed for the property tax levy; and
WHEREAS, the calculation of"net new state revenues" is based on the actual revenues
received during FY04 (July 1, 2003 to lune 30, 2004) compared to those
projected to be received during W05 (July 1, 2004 to lune 30, 2005); and
WHEREAS, the City projects that it will receive $223,940 in excess of the allowable
growth factor from the State as reimbursements for General Assistance
payments made by the City; and
WHEREAS, the increase in the City's local contribution to the General Assistance
Program is estimated to be $54,265; and
WHEREAS, the General Assistance Program is essentially a State program that is locally
administered under the rules and regulations of the State of Maine; and
WHEREAS,. recent increases In the cost of the General Assistance program reflect a
growth in the number of individuals who qualify for such assistance and
higher levels of support, particularly rent payments, required by the State of
Maine; and
os-uo
WHEREAS, the City, therefore, does not have the ability to control expenditures made
for this program; and
WHEREAS, to reduce the City's tax levy limit in recognition of the additional
reimbursements received from the State for this program would require the
City to reduce and/or eliminate services provided to our residents; and
WHEREAS, it is apparent that the legislature, in drafting the -net new state revenue"
Law levy reduction requirements, did not take the General Assistance
Program into consideration and it is doubtful that they intended this result;
and
WHEREAS, the legislature has authorized municipalities to increase their property tax
levy limit by majority vote of the City Council;
NOW, THEREFORE, BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR
THAT
In accordance with 30-A MRSA Sectors 5721-A. 6. and 7. A, It IS the intent of the City
Council W increase, and we hereby do increase, the property tax levy limit for Fiscal
Year 2006 by the amount of $278,205. This represents the amount of additional state
General Assistance reimbursement that the City estimates it will receive in excess of the
legislatively mandated growth limit on "net new state revenues" as set forth in 30-A
MRSA Section 5721-A. 4. and the additional local share required of the City under the
State General Assistance Program fa the City's Fiscal Year 2007.
I9 CITY Council
Jose 13, 2005
!lotion Made sod Seconded
for Passage
Pasa
TT CLBB&
* 05-210
('1'ITLL)AntMeialmm the N rat Too, 2W6
Tax Levy to Increase above the Property
T,, TARY liffir A,
30-A HESA Sections 5721-A, for the Purpose of
F
ca
Revenues frog the Coaputation of the Tax
�zy t
geconguize the Growth in the City's Share
of Expenditures in the General desistance
Program
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