Bath residents stand in line waiting to vote at Bath Middle School on Tuesday, Nov. 2. Kathleen O’Brien / The Times Record

Bath voters approved a charter change expanding a list of items excluded from the city’s annual spending limit,  1,773-876, Tuesday.

City leaders advocated for the change, saying it would avoid $900,000 in budget cuts while not raising residents’ taxes.

In 1988, voters approved a spending cap to keep tax rates low. The cap fluctuates because it is based on the National Consumer Price Index, which measures the average change in prices of goods and services.

Some expenses, however, don’t count toward the city’s spending limit, such as grants, voter-approved bonds and insurance proceeds. With the charter change passed, the list of what is excluded from the spending limit will broaden to include legally necessary costs like employee programs and county taxes, according to City Manager Marc Meyers.

“I’m pleased with the voters’ support for changes to the expenditure limitation,” Meyers said Wednesday. “This charter amendment is a step forward for the city and its residents. We were reaching a critical juncture. This change helps us to maintain services and be more fiscally responsible in the future.”

A change was needed because a tax agreement the city, state and Bath Iron Works made in 1997 to help the shipyard be more competitive is set to expire Sept. 30, 2023. Revenue the city gets from the BIW tax agreement covers expenses like city salaries, road and infrastructure projects and economic development, and those expenses don’t count toward the city’s spending limit.

When the tax agreement ends, however, all the expenses under the agreement will fall within the spending cap. If voters hadn’t approved the rule change, the city would face needing to make $900,000 in cuts to stay under the spending cap.

According to Meyers, a $900,000 cut is comparable to the loss of two fire and emergency medical technician positions, two patrol officers, one plow driver, curbside trash collection, road and sidewalk maintenance, funding for Main Street Bath, flowers, fireworks and holiday lights.

Bath has been inching uncomfortably close to the spending cap, Meyers said, amplifying the need for the change.

Five years ago, city spending was $223,000 below the spending cap. This year, the city was just $35,500 under the spending cap.

In total, 7,497 Bath residents voted in the election, representing a 38% voter turnout.