WINDHAM – Windham officials spent three hours Tuesday night detailing potential cuts to town programs and services should Gov. Paul LePage’s proposals to balance the state budget receive legislative approval.

Last month, LePage proposed suspending state revenue sharing for the next two years. This year, Windham received $975,000 in revenue sharing. LePage’s budget also eliminates the Homestead Exemption for homeowners under age 65 as well as the Property Tax and Rent Refund program, also known as the circuit breaker program, for lower-income homeowners and renters. The budget also exempts tractor-trailers from paying excise tax.

Town Manager Tony Plante told councilors Tuesday night that LePage’s efforts to balance the state’s books would come at the expense of local property taxpayers. In Windham, the combined loss of exemptions and revenue sharing would total $1.55 million.

While the Legislature has the last word on the state budget, Plante said he and local department heads are required by the Windham town charter to draft a budget by late March to present to the council for its review. The council then has the authority to refine the manager’s budget by the end of May before sending its version to the public at annual town meeting in mid-June.

Since state revenue-sharing figures won’t be known until the Legislature finalizes its budget in June, Windham budget-makers need to proceed as if LePage’s proposals will take effect, Plante said. As a result, Plante said, town leaders have three options to pursue: cut programs and services, raise taxes, or find revenue somewhere else by increasing fees.

“We don’t know what the outcome of the legislative process will be yet. All we know is what the governor proposed,” Plante said. “These kinds of proposals have real-life consequences, real-life impacts on our budget and the budget of all the other 491 cities and towns in Maine.”

Plante also made it clear that he would bring a budget to the council that doesn’t raise taxes on Windham residents, who will already be paying more due to the governor’s proposals to slash property taxpayer exemptions. Last year, Plante said, about 3,100 Windham homeowners saved an average of $143 due to the homestead exemption and about 1,100 homeowners and renters saved an average of $549 from the circuit breaker program.

“I won’t seek to increase the property tax levy to make up for the revenue losses as a result of the state budget process,” Plante said, adding that voters at annual town meeting or the council could choose to increase taxes if they wish. “All I’m saying is that is not a place I’m going to go, particularly where taxpayers are already at risk for the loss of their homestead exemption and circuit breaker, my judgment is enough is enough.”

Potential cuts

Aiming to reach the $1.55 million figure to offset the state’s impact to the local budget, Windham’s department heads took to the podium Tuesday night to detail potential cuts to programs and services.

Options – the word used by the town manager to describe the proposals, since the council and residents would be the final authority on the matter – ranged from cutting hours and positions at the library, police and fire departments to eliminating the town’s communication services, including the town’s website, email service and Channel 7.

The big-ticket items that were identified included eliminating curbside recycling, which costs $284,000 a year; trimming the road paving budget by $250,000; eliminating the 26th sworn police officer as well as the animal control officer, which could save about $100,000; closing Dundee Park and the Windham Skate Park, which could save about $65,000 per year; and cutting an assistant town planner and planning secretary.

As the department heads ticked off potential cuts, Plante kept a running total. All told, the proposed cost savings came out to about $1.3 million, leaving the town $250,000 shy of the $1.55 million needed to keep the budget flat-funded. Councilors said the remaining balance could be covered by contingency, also known as undesignated fund balance, which, Plante said, could “buy the town time” since the need to cut is immediate and doesn’t leave much time for thoughtful review.

Windham’s contingency fund is significant. Per council rules, it is required to be 16.66 percent of the total annual budget, which this year is $13.9 million. Plante said the contingency already exceeds the required amount by $350,000, leaving plenty in reserves should emergencies, which Plante described as budget “craters,” ever occur.

While he doesn’t advocate dipping into contingency, a sentiment seconded by Councilor Peter Anania, Plante said it might be warranted to keep taxes from exploding or services from imploding.

“Maybe we look at fund balance as a way of not kicking the can down the road so much as buying time for this next year or part of this next year to really look at the programs and services that we provide and having a thoughtful discussion, engaging the community, and say, ‘Look, who are we as a community, what are we going to do, what are we not going to do,’” Plante said. “I feel like we’re being, to some degree, pressured into making a decision in a very short period of time when we may not understand all the consequences of that decision.”

At the end of the presentation, councilors were appreciative of having the options and their potential impacts laid out. Anania, a member of the finance committee, which has first crack at the town manager’s budget, said the council’s job of reviewing the budget will be easier by the readymade list of cuts.

Councilor David Nadeau took umbrage with LePage’s failure to follow state law regarding revenue sharing and school funding. He said the state government isn’t adhering to the law that requires the state to cover 55 percent of local school funding.

“My point would be, if he can break the law and do it any way he wants, then why can’t we break the law as a town and say we’re going to raise sales tax by a penny?” Nadeau said.

Chairman Matt Noel said the list of options gave the council “a lot of things to think about. This is obviously a significant challenge that we’re facing and it’s not going to be easy.”