Windham officials reported last week that the town could be spending $300,000 more than it makes in 2009 if current spending and taxes continue along their current trend.

Windham Finance Director Brian Wolcott said the potential deficit for the 2009 fiscal year, which runs from the beginning of July 2008 to June 2009, will be around $328,000 if nothing happens to reverse the trend.

The deficit swells to more than $1 million in 2013 under the same projection.

“The outlook isn’t too promising over the next few years,” said Wolcott.

Wolcott said there are three options Windham officials have for fixing the potential deficit: cut back on spending, urge citizens to approve a property tax that exceeds LD 1, or some combination of both.

“We can cut budgets so that they’ll be in compliance with the property tax levy limit,” he said. That would mean cutting back on programs and services.

In 2005 the Maine Legislature passed LD 1 into law, which limits the growth of taxes in Maine. Windham cannot simply raise taxes to generate an additional $300,000 because that would exceed the property tax cap set by LD 1.

“Some communities seek to override the property tax limit,” said Wolcott. He said Windham residents could vote at the annual town meeting to raise taxes above the limit set by LD 1.

“It’s not what I would characterize as a deficit, because the budget doesn’t exist yet,” said Town Manager Tony Plante. He said town government has brought the possible deficit to the attention of the town council so it can deal with it as quickly as possible.

“We absolutely have to get on the case,” said Town Council Chairman John MacKinnon.

In years past the budget process would begin in individual departments in January. This year department heads will first meet with the town council to discuss cost-cutting ideas before they start proposing a budget.

Plante said two guiding principles the town uses when proposing a new budget are to try to keep current programming and services intact and comply with LD 1.

“The two principles are in conflict with each other,” said Plante. He said he’s doing what he can to make sure the town council is aware of that conflict.

Deficit1-2: There is a gap of $328,000 projected for 2009 between what the town is expected to spend and what the town makes in property taxes. Town officials said something has to change to bridge that gap.Deficit1-2: There is a gap of $328,000 projected for 2009 between what the town is expected to spend and what the town makes in property taxes. Town officials said something has to change to bridge that gap.