In economic downturn, tax burden could be heavy



By Liz Graves and Sarah Hinckley 

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MOUNT DESERT ISLAND — Town officials are discussing ways to prepare for downstream effects of the coronavirus emergency. Non-tax revenues are shrinking, applications for General Assistance are up and many residents will have a harder time paying their tax bills. 

“Of any year that I can think of in the last 14 that I’ve been in Southwest Harbor, I have to believe that this is probably going to be the most dire,” Southwest Harbor Selectman Ryan Donahue said at an April 14 meeting. “Greater than 2008 and 2009, greater than the concern of shutting down Main Street for roadwork, greater than anything else.” 

“Many people make a large portion of their money from spring through September or October,” he added. “Half of their income could be made between April first and August first. I think that we need to be considerate and think hard about ways we can support our citizens.” 

Town staff 

Southwest Harbor has one municipal staff member on a temporary leave of absence who is eligible for unemployment insurance and who is also still on the town’s health insurance plan. Other towns have reduced staff hours. 

Bar Harbor employees are using sick time for “unproductive” paid time spent at home, according to Finance Director Stan Harmon. 

Almost half of the town’s 75 employees have taken some time off for “self-quarantine fears, family obligations, health concerns of family members, etc.” since the beginning of the pandemic emergency. The town’s employees normally take an average of 100 hours of sick leave per week, collectively; during the first weeks of the emergency it was up to 327 hours per week. 

School costs 

School budgets are a large slice of the town budgets. At Tuesday’s meeting of the League of Towns, Superintendent of Schools Marc Gousse answered questions about how those budgets are changing. 

With the school buildings closed, the district’s electric and oil costs have gone down. But other costs are up, especially those related to the increased reliance on technology. 

“I would be surprised if we did not see curtailments of state and federal funding, even when those budgets have passed,” he said. “The challenge for us will be navigating collective bargaining and health insurance costs.” 

The school system budget has already passed, but that budget is “predicated on the passage of all the local budgets,” he said. 

The district has not furloughed any employees, including coaches and activity advisors, and does not intend to do so for the remainder of the current school year. 

Schools have become “de facto social service agencies” during the crisis, he said, providing crucial social and emotional support. Even though the organized spring sports season has been canceled, he said coaches and advisors are “playing a key role, reaching out to kids and documenting those contacts.” 

Special education programs are required by law, he noted, and are “off the table” when school and town boards are looking for where they can make cuts. 

Adjustments 

At the April 14 meeting of the board of selectmen, Donahue suggested building projects, including work on the Manset dock and new public works building, could be postponed. “We didn’t build it last year and we’ve still functioned,” he said of the public works garage. 

“There isn’t a ton of room to cut” the budget, VanDongen said in the League of Towns meeting. “Nothing that’s going to help someone who’s unemployed be able to pay their taxes.” 

He suggested reducing the interest rate on overdue tax payments from the current eight percent to one or two percent or even to zero. 

“Let us remember that the voters are still the people who are going to approve the expenditures,” said board member Kristin Hutchins. “They could simply vote no on some of the expenditures we’re making and we’ll have to adjust.” 

That town’s municipal election is set for July 14, to coincide with the state primary. The Town Meeting is expected to be held the day before, either at the elementary school if the building is available or at the fire stationVanDongen said this week. 

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