Residents throng hearing on 35% Lebanon tax increase

"Resident Kari Mosher stood up and said to selectmen, "You're all saying 'yes, that's a good idea,'" to townspeople's suggestions, "but you're not writing down any suggestions."
A statement that it was "time to get new selectmen" was met with applause from Lebanon residents"

Foster's Daily Democrat Sunday, October 12, 2008

LEBANON, Maine — Residents packed the elementary school's gymnasium on Sept. 29 for a public hearing on the town's 35 percent property tax increase this year. Resident Steve Endsley, who ran for a selectman's position earlier this year, said taxes had gone down the past two years, which "gave everybody a false sense of security."

"Why do you have to raise it all at once and kill everybody?" he asked.

Selectmen Chairwoman Judy Churchard said the increase, which was set in August, was not something officials wanted to do, but the town's former auditors had not given the town its 2007 audit by April 1, and when they hired a new auditor, town officials found out about the state of the town's tax figures. In the past two years, the tax rate went down because the town took money from the surplus and used it to lower taxes, Churchard said.
But selectmen had no immediate answer after a resident demanded to know "who authorized them to take money out of the surplus the past two years?"

Churchard later said referendums each year have allowed for the use of the surplus to lower the tax rate but, this year, there was not enough in the surplus to do so.
This year, the town's $1.1 million surplus instead "has to be used to pay the bills," Churchard said. New town auditor Ron Smith, managing partner of RHR Smith and Company, said $350,000 to $400,000 of the surplus also already is designated for federally funded road projects resulting from the Patriot's Day storms last year.

Churchard said the state owes the town money for the road projects, but has not yet paid its portion. Payment for road work should have been divided up, with the federal government paying 75 percent, the state 15 percent and the town the final 10 percent. The town also has to pay back $250,000 because the Federal Emergency Management Agency "way overestimated" what the town needed, she said. Smith said there needs to be more transparency with the budget and changes to the way the town does business.
In taking money from the surplus and using it to keep the tax rate low, town officials were "doing something they shouldn't have," and the only way to fix the problem is with a better flow of paperwork, Smith said.
There were some in the crowd who suggested using the undesignated portion of the surplus to lower the tax rate, as the town had done in prior years. But Smith said doing so would only exacerbate the problem, and by tackling the problem by raising taxes now, the town can avoid the problem in the future. "If we took $740,000 now to lower taxes, you can do that and then come back next year and have the same conversation," Smith said.
One Lebanon resident asked if it was possible to put together a new budget, get the town on a spending plan and cut out the things they no longer need. "We've never had to do that before," Churchard said, adding that she does not know how to go about taking such actions.Town residents expressed frustration during the meeting. 

Resident Kari Mosher stood up and said to selectmen, "You're all saying 'yes, that's a good idea,'" to townspeople's suggestions, "but you're not writing down any suggestions."
A statement that it was "time to get new selectmen" was met with applause from Lebanon residents.

Smith said the town is too big for three selectmen to manage alone and Churchard suggested Lebanon get a town manager. As the meeting adjourned, Churchard praised the fact that people are getting more involved in local government, and before the tax increase, people were not going to meetings or voting.

Another meeting to discuss the property tax issue has been tentatively set for 7 p.m. Oct. 28.