ROCKLAND — As the City Council struggles with requests for additional staffing to maintain public safety and recreation services, the concern is that the city’s property tax burden will worsen.

Frequent criticism from residents include that the city spends too much; the school district spends too much; and that tax-exempt, non-profit organizations do not contribute taxes.

But how does Rockland’s property tax compare to other communities? And what is behind that tax level?

The Maine Bureau of Revenue Services compiles annually a list of “full value tax rates.” These rates are often not the same as the tax rates used by municipalities to collect property taxes. Instead, the full value rate is computed as if each municipality was assessing its property exactly at 100 percent of value.

The state released its most recent list of full value tax rates earlier this year — based on the amount of property taxes billed by a municipality in 2020 and the 2022 state valuation of those communities.

Rockland full value rate was determined to be $22.29. This is the 17th highest rate in Maine. A year earlier, Rockland had the 15th highest.

County seats such as Rockland typically have higher than average tax rates because they provide more services and have far more people in the community than their population would require. There are more demands for services such as wastewater treatment, maintaining roads, and public safety than the population of 7,172 people would normally need. The number of people in the city swells significantly since the city is the retail and employment center for the region.

The state average for the full value tax rates is $14.10. The highest rate is East Millinocket at $38.72. Bangor’s rate is $21.33, Brewer $21.60, Augusta $19.31, Belfast $20.18, Bath $21.29, Portland $15.59, and Ellsworth $17.52.

Rockland has the highest full value rate in Knox County although Thomaston is close behind at $20.94.

The city sent out bills totaling $19.9 million last fall. Of that amount, 55 percent ($10,867,000) went to Regional School Unit 13. Another 5 percent ($907,000) went to Knox County. The remaining 40 percent ($8.1 million) went to the municipal government.

The City projects that taxes will go up $316 this year for a person with a home assessed at $200,000 because of increases in those three governmental budgets.

The Rockland City Council will take a preliminary vote on the municipal budget Monday evening and a final vote is scheduled for Monday, June 27.

RSU 13 will hold its district budget meeting on Tuesday evening, May 24 at 6 p.m. at Oceanside High School’s auditorium. Registered voters of the five district communities can attend and vote on the Board’s proposed budget. Additions or reductions can be made by a majority vote of those in attendance. Rockland would pay an additional $302,900, a 2.8% increase if the budget is approved as recommended. Clerks from each municipality will be there to register new voters.

The approved Knox County budget will require an additional $24,000 in taxes from Rockland. The 2022 county budget covers services such as the sheriff’s patrol and jail.

Tax exempt properties

One of the most frequent criticisms voiced by residents is that the large number of non-profit agencies that do not pay property taxes plays a large role in the city’s higher than average tax rate.

The amount of tax-exempt properties in Rockland totals $280 million, covering 233 parcels. The overwhelming amount of the tax exempt property, however, is owned by government including the federal, state, county, city and schools. For example, the Rockland Breakwater, owned by the U.S. Coast Guard, is valued at $77 million.

About $50 million of the tax-exempt properties are owned by private non-profit organizations such as non-profit museums, health care organizations, churches, and social service agencies. If all were taxed, that would generate an additional $1.1 million in tax revenues for Rockland. That would drop the city’s tax rate by about 5 percent.

State law exempts the non-profit agencies from the property tax. The City Council during its deliberations on the proposed 2022-2023 budget asked the city administration to send out notices to non-profit agencies asking for voluntary contributions in lieu of taxes.

But profit-making businesses also benefit from state law and tax exemptions. The state allows manufacturers to have business equipment exempt from the property tax. In Rockland, for example, international company DuPont Nutrition USA is allowed to have $15.7 million of its equipment exempt from the property tax, saving them $355,000 which otherwise would have gone into the city’s tax coffers.

Snowplow-maker Fisher Engineering’s parent company Douglas Dynamics also receives an exemption for some of its equipment, which saves the company more than $300,000.

School funding

The state school funding formula is designed to distribute aid to communities based not only on the number of students but also to those districts considered poor. The state, however, uses property valuations to determine the wealth of a community. Coastal communities with higher valuations therefore receive less state aid.

RSU 13 officials have repeatedly pointed out that if the state education formula factored in a community’s median income, the district would receive millions more in aid, thus reducing the property tax rate in the district’s communities including Rockland.

RSU 13 is projected to receive nearly $7.1 million in state aid during 2022-2023, an increase of about $1.2 million.

The proposed RSU 13 budget for 2022-2023 is $35.3 million, an increase in spending of 6.8 percent ($2,272,100). Nearly $2 million of the $2.27 million increase is due to increased pay and benefits which are negotiated in labor contracts. Another $200,000 of the increase is due to higher energy costs.

Additional revenue, however, will limit the increase in property taxes needed from the communities to a 3.3 percent increase.

While RSU 13 saw an increase, other districts with similar enrollments receive considerably more state aid. RSU 71, which serves the Belfast area, is projected to receive more than $9.1 million in state aid even though it has fewer students.

Without additional state aid, the only way the district could reduce the tax commitment would be to cut staff. An attempt by a few board members to look at increasing class sizes by not filling vacant positions was rejected by the school Board. The administration and majority of board members said that increasing class sizes as the district continues to grapple with the impact of COVID-19 and the earlier loss of instruction time would harm students.

City expenses

The overall municipal spending package is proposed at $15,545,000, an increase of 7 percent ($1,076,000) over the approved 2021-2022 budget.

More than half of the budget goes to the three largest departments — public services (which includes the operation of the solid waste facilities), fire/emergency medical services, and police. Another nearly $1.4 million goes for repayment of debt previously approved by voters. And another nearly $700,000 goes to public-funding utilities such as hydrant rentals.

The proposed increases include the addition of another three-person shift for the fire department, and an addition to the police department. The proposals are being made to retain public safety staff in the chaotic and competitive job market. Energy costs are another driver of the increased municipal budget.

Councilors have voiced support for the public safety requests and more will be known when the Council votes May 23.