Old Town, Maine is grappling with a significant budget deficit, primarily due to the closure of the ND Paper mill which resulted in a $1.5 million loss of tax revenue. The state provided nearly $1.8 million in aid, but this is insufficient to fully cover the shortfall. Additional financial burdens include a near $180,000 increase in the Regional School Unit 34 budget and an almost $126,000 rise in county taxes.
Initially, the city projected a 38 percent property tax increase. However, by implementing various cost-cutting measures, the expected increase is now projected to be 12 percent or less. The city is exploring the option of utilizing funds from its financial reserves to further reduce the tax increase, with each $100,000 used from the fund balance lowering the tax increase by 1 percent. The city is also planning to cut 17 positions: 12 full-time and 5 part-time positions. The specific roles to be eliminated are yet to be determined.
The City Council faces a critical decision: how much to draw from its fund balance to balance the budget and minimize job losses. This process involves weighing the need to maintain essential services against the desire to minimize the tax burden on residents. The council must finalize the budget before July 1.