10.  FISCAL CAPACITY

 

Westport does not have any industrial or commercial base from which to draw revenue. By and large all money raised by Westport derives from residential property owners. Given past trends, there is little likelihood of any increased assistance from the state in the near future. On the contrary, Westport's increased state valuation has led to a reduction in state financial assistance for education. Under these circumstances, every effort must be made by Westport's officials and representatives to hold the line on expenditures. This is one reason why there is a need to develop a Capital Investment Program to review and budget for significant anticipated town needs well in advance.  There is also a need for the School Committee to examine all options for Westport, in cooperation with the other towns who send tuition students to Wiscasset, to deal with our financially costly dependence on Wiscasset schools, without diminishing the quality of our children's education.

 

Rising expenditures will continue to be a burden for the community, since there is little give in the town's fiscal situation. Westport offers virtually no public services beyond public education, road maintenance and snow removal, and fire protection.   Westport has no indebtedness. In view of the island's small size and limited fiscal capacity, minimizing debt seems like a sound policy. Continuing increases in education costs, and possibly a larger fee for Westport if the costs of the Wiscasset Transfer Station continue to grow, will in all likelihood mean further increases in the island's taxes. Considering that Westport has virtually no commercial or industrial base, it is evident that the funds will have to continue to come from personal property taxes. Under the circumstances, the time has probably arrived for the State Legislature to tackle funding the costs of education by some more equitable means than property taxes.

 

Historical Valuations and Taxes

 

Both the Town of Westport and the State of Maine compute valuations for the Town. The State compiles and adjusts its figures to reflect actual property transactions, and hence market values.  Westport’s valuations will reflect market value only in those years in which the Town conducts a revaluation and adjusts values to reflect market conditions.  State valuation figures for any given year are two years old, and thus do not reflect recent changes in overall property values.  State law requires that when a municipality’s valuation drops below 70% of the State valuation, a revaluation must be undertaken.

 

Table 1 provides a summary of Westport’s State valuation, municipal valuation, the tax assessment and tax rate for the years 1993 through 2000, as reflected in municipal valuations prepared by the State Bureau of Taxation and in municipal valuation returns.

 

During the period 1993 through 2000, Westport’s assessed valuation rose from $77.1 million to $85.2 million, or 11%.  A high valuation does not necessarily mean that taxes are high.  A community with a high valuation can raise a given sum of money with a relatively low tax rate, whereas a community with a low valuation can raise the same amount of money only with a higher tax rate. In this case, however, during the 1993-00 period, Westport’s tax assessment rose from $524,184 to $988,839, an increase of 89%.

 

 

Table 1

Historical Valuation And Taxes

 

 

State

Valuation

Municipal Valuation

Westport Tax Assessment

 

Tax Rate

1993

$72,100,000

$77,085,908

$524,184

6.8

1995

$72,050,000

$79,263,442

$578,623

7.3

1997

$72,800,000

$82,092,456

$747,042

9.1

1999

$91,050,000

$82,906,437

$870,519

10.5

2000

$79,650,000

$85,244,747

$988,839

11.6

 

 

 

 

 

Source: Municipal Valuation Returns Statistical Summary, 1993-2000, State Bureau of Taxation

           

Valuation Comparisons

 

State valuation comparisons and per capita valuations are two measures of a community’s wealth relative to other communities.  Table 2 contains a summary of State valuations and per capita valuations for Westport, Edgecomb, Wiscasset, Lincoln County and the State. In round figures, Westport’s per capita valuation ($107,000) is almost twice as high as the State average ($57,000), but is only slightly above the average for Lincoln County ($105,000).  Both Edgecomb and Wiscasset have smaller per capita valuations than Westport.

 

 

Table 2

Comparative Valuation Figures

 

 

2000 Population

2000 State Valuation

Full Value Per Capita

Westport

745

$79,650,000

$106,913

Edgecomb

1,090

$92,000,000

$84,403

Wiscasset

3,603

$344,900,000

$95,726

Lincoln County

30,357

$3,182,550,000

$104,837

Maine

1,274,923

$72,302,650,000

$56,711

 

 

 

 

Source: Municipal Valuation Returns Statistical Summary, 2000, State Bureau of Taxation and U.S. Census, 2000

 

Exempt Property

 

Table 3 provides an overview of tax exempt property in Westport, Edgecomb, Wiscasset, Lincoln County and the State of Maine. The value of total exemptions in Westport as a percentage of the total municipal valuation (1%) is lower than in all comparison jurisdictions. The average value of exemptions in Lincoln County is 6% of total valuations; the average for the State is 17%.  The low percentage in Westport is in part a reflection of the Town’s lack of public facilities and services.

                       

 

Table 3

Comparative Tax Exemptions - 2000

 

 

Total Municipal Valuations

Total Exemptions

% of Valuation

Westport

$85,244,747

$863,955

1%

Edgecomb

$82,959,776

$2,806,049

3%

Wiscasset

$316,162,607

$23,605,300

7%

Lincoln County

$3,180,472,897

$188,117,615

6%

Maine

$73,462,620,511

$12,493,894,733

17%

 

 

 

 

Source: Municipal Valuation Returns Statistical Summary, 2000, State Bureau of Taxation

 

Property Tax Burden

 

The Maine Municipal Association has compiled comparative tax burdens for municipalities, based on the 1999 full value tax rate.  Two measures are used to illustrate the tax burden at the taxpayer level; the tax paid on a median value home and tax paid as a percent of the median household income.  In the Property Tax Burden column in Table 4, the numbers represent statewide rankings where 1 is the highest tax burden, and 487 is the lowest.  The tax burden in Westport (240) is lower than in Edgecomb (96) and Wiscasset (88).

 

 

Table 4

 

Property Tax Burden Indicators

 

Full Value Mil Rate

Median Household Income

Median Home Value

Taxes Paid Median Home

Tax as % of Household Income

Property Tax Burden

Westport

10.76

$42,149

$148,993

$1,603

3.8%

240

Edgecomb

14.82

$41,967

$140,098

$2,076

4.9%

96

Wiscasset

14.84

$35,575

$120,652

$1,791

5.0%

88

 

 

 

 

 

 

 

Source: 2000 Property Tax Burden Indicators for Municipalities in Maine, Maine Municipal Association

 

Town Revenues and Expenditures

 

Table 5 contains a summary of municipal revenues and expenditures for the period 1995 through 1999, as reflected in the Town’s annual reports. Overall, revenues have kept pace with expenditures, primarily because of increases in the local tax.  In 1995, property tax revenues provided about 85% of the Town’s revenues.  The figure for 1999 was somewhat higher (89%). 

 

 

Between 1995 and 1999, taxes increased by 46%.  The single largest expenditure item is education.  Educational expenses increased 30% during the 1995-99 period, accounting for 62% of all expenditures in 1995 and 69% of all expenditures in 1999.

 

 

Table 5

Westport Revenues and Expenditures

For the Year Ending December 31

 

 

 

1995

1996

1997

1998

1999

2000

Revenues

 

 

 

 

 

 

 

Taxes

674,599

797,135

852,885

873,182

983,346

 

 

Licenses and Permits

3,651

1,973

2,628

4,675

5,939

 

 

Intergovern. Revenue

100,217

80,595

83,727

106,444

107,569

 

 

Interest

7,284

6,961

7,302

8,257

7,769

 

 

Donation

9,008

6,108

3,008

5,424

2,013

 

 

Other Revenues

629

4,061

6,200

9,001

2,530

 

Total Revenue

795,388

896,833

955,750

1,006,983

1,109,166

 

 

 

 

 

 

 

 

 

Expenditures

 

 

 

 

 

 

 

General Government

49,659

61,478

50,452

57,275

49,561

 

 

Protection

7,234

5,061

5,763

9,676

9,198

 

 

Highway

110,629

120,672

101,315

123,003

77,367

 

 

Health and Sanitation

26,534

26,038

29,843

32,103

58,096

 

 

Social, Human Services

8,781

7,640

9,294

7,558

9,570

 

 

Education

517,230

504,843

529,520

590,587

670,887

 

 

Debt Service

 

13,875

12,694

13,469

20,662

 

 

Employee Benefits

4,888

3,096

5,906

5,486

5,899

 

 

Special Assessments

50,843

54,491

59,974

65,672

75,953

 

 

Misc.

 

489

2,490

6,134

1,086

 

 

Capital Improvements

64,339

3,294

124,627

64,554

0

 

Total Expenditures

840,137

800,977

931,878

975,517

978,279

 

 

 

 

 

 

 

 

 

Excess Revenues/Expenses

(44,749)

95,856

23,872

31,466

130,887

 

Other Financing Sources

35,000

0

0

0

0

 

Adjusted Excess Revenue

(9,749)

95,856

23,872

31,466

130,887

 

Fund Balance, Dec. 31

359,717

455,573

479,445

510,911

641,798