10. FISCAL CAPACITY

Westport does not have any industrial or commercial base from which to draw revenue. By and large all money raised by Westport derives from residential property owners. Given past trends, there is little likelihood of any increased assistance from the state in the near future. On the contrary, Westport's increased state valuation has led to a reduction in state financial assistance for education. Under these circumstances, every effort must be made by Westport's officials and representatives to hold the line on expenditures. This is one reason why there is a need to develop a Capital Investment Program to review and budget for significant anticipated town needs well in advance. There is also a need for the School Committee to examine all options for Westport, in cooperation with the other towns who send tuition students to Wiscasset, to deal with our financially costly dependence on Wiscasset schools, without diminishing the quality of our children's education.

Rising expenditures will continue to be a burden for the community, since there is little give in the town's fiscal situation. Westport offers virtually no public services beyond public education, road maintenance and snow removal, and fire protection. Westport has no indebtedness. In view of the island's small size and limited fiscal capacity, minimizing debt seems like a sound policy. Continuing increases in education costs, and possibly a larger fee for Westport if the costs of the Wiscasset Transfer Station continue to grow, will in all likelihood mean further increases in the island's taxes. Considering that Westport has virtually no commercial or industrial base, it is evident that the funds will have to continue to come from personal property taxes. Under the circumstances, the time has probably arrived for the State Legislature to tackle funding the costs of education by some more equitable means than property taxes.

Historical Valuations and Taxes

Both the Town of Westport and the State of Maine compute valuations for the Town. The State compiles and adjusts its figures to reflect actual property transactions, and hence market values. Westport’s valuations will reflect market value only in those years in which the Town conducts a revaluation and adjusts values to reflect market conditions. State valuation figures for any given year are two years old, and thus do not reflect recent changes in overall property values. State law requires that when a municipality’s valuation drops below 70% of the State valuation, a revaluation must be undertaken.

Table 1 provides a summary of Westport’s State valuation, municipal valuation, the tax assessment and tax rate for the years 1993 through 2000, as reflected in municipal valuations prepared by the State Bureau of Taxation and in municipal valuation returns.

During the period 1993 through 2000, Westport’s assessed valuation rose from $77.1 million to $85.2 million, or 11%. A high valuation does not necessarily mean that taxes are high. A community with a high valuation can raise a given sum of money with a relatively low tax rate, whereas a community with a low valuation can raise the same amount of money only with a higher tax rate. In this case, however, during the 1993-00 period, Westport’s tax assessment rose from $524,184 to $988,839, an increase of 89%.

Table 1 Historical Valuation And Taxes
	State Valuation	Municipal Valuation	Westport Tax Assessment	Tax Rate
1993	$72,100,000	$77,085,908	$524,184	6.8
1995	$72,050,000	$79,263,442	$578,623	7.3
1997	$72,800,000	$82,092,456	$747,042	9.1
1999	$91,050,000	$82,906,437	$870,519	10.5
2000	$79,650,000	$85,244,747	$988,839	11.6

Source: Municipal Valuation Returns Statistical Summary, 1993-2000, State Bureau of Taxation

Valuation Comparisons

State valuation comparisons and per capita valuations are two measures of a community’s wealth relative to other communities. Table 2 contains a summary of State valuations and per capita valuations for Westport, Edgecomb, Wiscasset, Lincoln County and the State. In round figures, Westport’s per capita valuation ($107,000) is almost twice as high as the State average ($57,000), but is only slightly above the average for Lincoln County ($105,000). Both Edgecomb and Wiscasset have smaller per capita valuations than Westport.

Table 2 Comparative Valuation Figures
	2000 Population	2000 State Valuation	Full Value Per Capita
Westport	745	$79,650,000	$106,913
Edgecomb	1,090	$92,000,000	$84,403
Wiscasset	3,603	$344,900,000	$95,726
Lincoln County	30,357	$3,182,550,000	$104,837
Maine	1,274,923	$72,302,650,000	$56,711

Source: Municipal Valuation Returns Statistical Summary, 2000, State Bureau of Taxation and U.S. Census, 2000

Exempt Property

Table 3 provides an overview of tax exempt property in Westport, Edgecomb, Wiscasset, Lincoln County and the State of Maine. The value of total exemptions in Westport as a percentage of the total municipal valuation (1%) is lower than in all comparison jurisdictions. The average value of exemptions in Lincoln County is 6% of total valuations; the average for the State is 17%. The low percentage in Westport is in part a reflection of the Town’s lack of public facilities and services.

Table 3 Comparative Tax Exemptions - 2000
	Total Municipal Valuations	Total Exemptions	% of Valuation
Westport	$85,244,747	$863,955	1%
Edgecomb	$82,959,776	$2,806,049	3%
Wiscasset	$316,162,607	$23,605,300	7%
Lincoln County	$3,180,472,897	$188,117,615	6%
Maine	$73,462,620,511	$12,493,894,733	17%

Source: Municipal Valuation Returns Statistical Summary, 2000, State Bureau of Taxation

Property Tax Burden

The Maine Municipal Association has compiled comparative tax burdens for municipalities, based on the 1999 full value tax rate. Two measures are used to illustrate the tax burden at the taxpayer level; the tax paid on a median value home and tax paid as a percent of the median household income. In the Property Tax Burden column in Table 4, the numbers represent statewide rankings where 1 is the highest tax burden, and 487 is the lowest. The tax burden in Westport (240) is lower than in Edgecomb (96) and Wiscasset (88).

Table 4 Property Tax Burden Indicators
	Full Value Mil Rate	Median Household Income	Median Home Value	Taxes Paid Median Home	Tax as % of Household Income	Property Tax Burden
Westport	10.76	$42,149	$148,993	$1,603	3.8%	240
Edgecomb	14.82	$41,967	$140,098	$2,076	4.9%	96
Wiscasset	14.84	$35,575	$120,652	$1,791	5.0%	88

Source: 2000 Property Tax Burden Indicators for Municipalities in Maine, Maine Municipal Association

Town Revenues and Expenditures

Table 5 contains a summary of municipal revenues and expenditures for the period 1995 through 1999, as reflected in the Town’s annual reports. Overall, revenues have kept pace with expenditures, primarily because of increases in the local tax. In 1995, property tax revenues provided about 85% of the Town’s revenues. The figure for 1999 was somewhat higher (89%).

Between 1995 and 1999, taxes increased by 46%. The single largest expenditure item is education. Educational expenses increased 30% during the 1995-99 period, accounting for 62% of all expenditures in 1995 and 69% of all expenditures in 1999.

Table 5 Westport Revenues and Expenditures For the Year Ending December 31
		1995	1996	1997	1998	1999	2000
Revenues
	Taxes	674,599	797,135	852,885	873,182	983,346
	Licenses and Permits	3,651	1,973	2,628	4,675	5,939
	Intergovern. Revenue	100,217	80,595	83,727	106,444	107,569
	Interest	7,284	6,961	7,302	8,257	7,769
	Donation	9,008	6,108	3,008	5,424	2,013
	Other Revenues	629	4,061	6,200	9,001	2,530
Total Revenue		795,388	896,833	955,750	1,006,983	1,109,166
Expenditures
	General Government	49,659	61,478	50,452	57,275	49,561
	Protection	7,234	5,061	5,763	9,676	9,198
	Highway	110,629	120,672	101,315	123,003	77,367
	Health and Sanitation	26,534	26,038	29,843	32,103	58,096
	Social, Human Services	8,781	7,640	9,294	7,558	9,570
	Education	517,230	504,843	529,520	590,587	670,887
	Debt Service		13,875	12,694	13,469	20,662
	Employee Benefits	4,888	3,096	5,906	5,486	5,899
	Special Assessments	50,843	54,491	59,974	65,672	75,953
	Misc.		489	2,490	6,134	1,086
	Capital Improvements	64,339	3,294	124,627	64,554	0
Total Expenditures		840,137	800,977	931,878	975,517	978,279
Excess Revenues/Expenses		(44,749)	95,856	23,872	31,466	130,887
Other Financing Sources		35,000	0	0	0	0
Adjusted Excess Revenue		(9,749)	95,856	23,872	31,466	130,887
Fund Balance, Dec. 31		359,717	455,573	479,445	510,911	641,798