South Portland Mayor Misha Pride will look for cuts in city spending next fiscal year after the discovery of a $4 million shortfall in this year's city budget. A reporting error by the city manager's office discovered this week overestimated city revenue and underestimated the city budget.
Mayor Pride says City Manager Scott Morelli has already found a way to cover $3 million of the $4 million in the budget, but that a higher increase in property taxes is needed to fully fund the city's budget.
"In the end, this wasn't a mistake that necessarily harmed taxpayers this year," said Mayor Pride in a phone interview. "Will it harm them in the future? I don't think so. I think what we'll do is, do everything we can to keep the shock of a much larger tax down next year. But unfortunately, you know, we can't make any promises. We just have to do our best to roll up our sleeves and examine that budget very carefully."
Led by South Portland City Manager Scott Morelli, the City Finance office accidentally double counted state revenue from two South Portland's tax exemption programs: the Homestead and Business Equipment Tax Exemption programs. These programs offered by South Portland excuse part of the taxes owed by the eligible parties.
South Portland, like other municipalities, uses property taxes to finance much of the city's annual expenses. Because the budget was incorrect, the tax rate of $14.14 was not enough for South Portland to cover all the actual expenses. The appropriate amount should have been closer to $14.69, per a recent press release from the city. While the shortfall is independent of the rising cost of city services, Mayor Pride says he'll be combing over the budget to limit that shock in property taxes.
"The things I'll be looking at are potential new positions where a department feels like they need a position to do a more service," said Mayor Pride. "I'll be looking at those positions very carefully to see if we really need to do more for in that department or if what they're doing now is satisfactory, and they can work with what they have."
City council members will vote later on whether to use the city's resource fund to pay off the remainder for this year.
