Standish Town Manager Gordon Billington has proposed a town budget that increases spending 5.9 percent, yet decreases the property tax rate 2.4 percent.

The municipal portion of the tax rate would decrease 29 cents to $11.86 per thousand of valuation. A property valued at $200,000 would decrease $58 to $2,372, not including tax impacts from school or county.

Billington’s $8.21 million proposed budget, which will be discussed at a Town Council public hearing on Tuesday, manages to accomplish this feat by assuming Gov. Paul LePage’s tax overhaul package will be ratified by the Legislature this spring.

LePage’s plan, which eliminates municipal revenue sharing next fiscal year while eliminating the homestead property-tax exemption for homeowners under the age of 65 and assessing property taxes on nonprofits valued over $500,000 this year, would increase Standish’s tax base by about $40 million, or 4 percent, according to Tax Assessor Peter Arnemann.

About $17 million of the tax-base increase in the proposed budget comes from the changes to the homestead exemption, which currently cuts $10,000 in valuation from all homes, Arnemann said. Under LePage’s plan, the homestead exemption will be eliminated for homeowners under 65 and doubled to $20,000 for those 65 and older. According to Arnemann, the town has about 2,200 homestead exemptions, about 200 of which belong to residents 65 and older. A homeowner has to live in the home more than six months to claim the exemption.

The remaining $23 million in new valuation comes from LePage’s proposed modification of the nonprofit tax exemption, which would tax large nonprofits at half the municipal property tax rate but exempt $500,000 of each organization’s property value from taxation. In Standish, only three no-profits own property valued at more than $500,000. In the proposed budget, the Salvation Army’s Camp Sebago would pay $22,000 in new property taxes, while the Standish Kiwanis Club, with property on Watchic Lake, would pay $8,000. Neither nonprofit has paid property taxes in the past, Arnemann said.

Saint Joseph’s College, which last year paid the town $10,000 for non-exempt property such as teacher housing, would contribute an additional $230,000 in property taxes in the proposed manager’s budget. The Portland Water District, which is considered a municipal entity, would not be taxed under LePage’s proposed plan. It owns most of Standish’s waterfront on Sebago Lake.

Since the town hasn’t kept tabs on those entities’ land holdings, Arnemann said his estimates on the new nonprofit tax assessments could be low.

“These have been long-exempt institutions,” he said. “We probably haven’t paid as close a look at what they’ve got as what we should now. It’s possible that they may be higher.”

Town officials say the increased valuation is meant to offset the proposed cuts in municipal revenue sharing. Yet, under LePage’s proposed plan, revenue sharing will not be eliminated until next fiscal year. Billington’s budget projects that the town will receive $296,933 in revenue sharing this year, nearly $17,000 more than the town received last year.

With the tax base revived to pre-recession levels and revenue sharing still flowing in, Billington’s budget delivers a 5-percent pay raise to the town’s salaried employees. According to Billington, the increase will return the salaried municipal employees to their long-term pay schedule, which was interrupted in fiscal year 2010, when salaries were slashed 5 percent.

“In essence, it restores what they lost,” Billington said.

The proposed budget also delivers a 1.7 percent wage increase to the town’s hourly wage earners, in line with the federal government’s cost-of-living adjustment measure. In total, it increases spending by $458,358. The proposed budget increases spending on the town’s cable television channel by 23.9 percent, General Assistance by 12.4 percent, and debt service by 16 percent, while decreasing spending on law enforcement by 4.7 percent and solid waste by 1.7 percent. The budget also includes spending to construct a municipal beach.

If LePage’s tax package fails in the Legislature, Arnemann projects that the town’s property tax rate may increase by a tiny fraction – perhaps by 1 or 2 cents.

“It’s hard to predict,” he said.

Standish nonprofits potentially affected by the proposed budget offered a muted reaction this week to the news of looming tax increases.

“Saint Joseph’s College is committed to the integral role we play economically and socially in the Greater Standish community,” said Jim Dlugos, president of the college. “We look forward to continuing to work closely with our neighbors in Standish and the Lakes Region to ensure the area’s vibrant future as well as the future of our students.”

Dan Kasprzyk, president-elect of the Standish Kiwanis Club, said he needed more information.

“At this point, we just haven’t seen all the final numbers,” he said.

Major Asit George, divisional secretary of the Salvation Army of Northern New England, said he was eager to see how the Legislature responds to the governor’s tax package.

“We have not paid taxes on Camp Sebago and at this point we are going to wait for that information from Augusta on how this proposed budget by Gov. LePage passes,” he said. “So we are all waiting.”