The budget proposed by the Portsmouth Town Council for next year is one of the worst produced in the last twenty years. This budget is characterized by the Council’s complete lack of interest in reducing costs to prepare for the economic downturn and its continuing emphasis on the growth of town government. In fact, the only changes over a routine year are using the Fund Balance to provide revenue for routine spending and to cover any shortfalls in state funding. Currently, the budget is at the Provisional stage and there are further votes, but significant changes after this point are rare.
The budget that begins next July 1 has a residential property tax increase of 4.43% at a time when the unemployment rates for Portsmouth taxpayers are probably at least 16%. Yet, the Council has placed the interests of government before those of the taxpayers. The tax increase on homes is the highest in many years. The tax increase for residential property is $2,125,931 and totals $50,114,507. The total tax bill is $57,734,294 and the overall tax increase is 3.60% and remains under the tax cap increase limit of 3.999%. The only reason that the Council hasn’t exceeded the tax cap is that commercial property taxation fell by 7.32%, apparently because of a decline in valuations in that category.
We in Portsmouth have the highest residential property taxes in the area. Middletown, Tiverton, Bristol, Newport and Little Compton all have lower tax rates on homes, and this is before the new tax increase is levied.
The total budget is $66,726,409, an increase of $1,848,166 over last year. It should be emphasized, however, that the issue of undeclared revenue is unresolved and approximately $1,835,000 in Federal funds to the School Department is not included anywhere in the Town’s budget. These funds are presently received and spent off budget, and out of sight of the public.
The commercial property tax actually declined 7.32%. At this point, we believe it was because of the revaluation conducted this past year. The residential property values increased 12% and the mil rate will be 15.004 for all three categories of real property. (Inventory is the third category.)
The Budget Hearing is required by the Town Charter and the Council does not have authority to cancel it. The Council must also adopt a budget ordinance in order to levy taxes, and that is scheduled for June 22. This ordinance is required to be heard in a public meeting by state law. At this point, the Council has made no decisions. I remind everyone that without that ordinance, duly passed, the Council does not have authority to tax property for the next fiscal year.
During discussion of the new budget, only one Council member, Linda Ujifusa, made any attempt to reduce spending by proposing the School Committee use its reserves to pay for a School Department item in the Capital Improvement Plan. This proposal, however, is unlikely to be successful.
All votes on the budget segments so far have been 7-0 for approval, with one exception. In the recreation section, Councilwoman Abbott wanted to spend more and voted No in protest.
The national unemployment data was released for the week ending April 11 on Thursday, April 23. Over 4 million Americans filed for unemployment in that week. The national unemployment rate is now about 16%. The highest unemployment rate for Portsmouth in the last recession was 12.4% in January of 2011.
While other local governments on the Island are cutting back to prepare for the hard days to come, Portsmouth’s prefers to take this opportunity to grow the tax base.