- Tax Savings Guarantees
- Paying Off Debt
- Differences In Assessed Valuation
- Savings Impact For Individual Tax Payers
- Storm Water Fee
Can you guarantee that the taxpayers will see those savings?
There are no guarantees in life or in taxes. We are highly confident that there are at least $2.3 million of annual savings to be found if the cities merger. They have been identified them in great detail, department by department in the Commission Recommendations and Rationale report and the Consolidation Options and Impacts study both of which are posted on the Commission’s website.
Beyond those conservative numbers, we are confident there are additional savings to be found as departments are integrated and people look creatively how to do things better.
It will be up to the new city council, elected by the voters and guided by professional staff, to decide what to do with savings. They will be able to reduce taxes, reduce the growth of taxes, make capital investments, improve services, or any combination thereof.
There is one certainty. If there is no merger, annual savings between $2.3 and $4.2 million will not be realized. Therefore, taxes will rise at a faster rate and/or services will be reduced.
Will Auburn-side taxpayers have to pay off that higher Lewiston side debt?
No. Auburn side taxpayer will have rates set so that only Auburn’s current debt will be apportioned to them. Likewise, only Lewiston taxpayers will pay off Lewiston’s current debt. After merger, new debt will be equally shared. After all current debt is retired, taxpayers on both sides of the river will pay exactly the same rate.
How have differences in property valuations between Lewiston and Auburn been taken into account?
Lewiston’s tax rates are considerably higher than Auburn’s tax rates, but Lewiston’s property valuations are below market value and below Auburn’s property valuations, which are at close to market rates. Our report adjusts the valuations against state valuation levels so that they can be properly compared.
When that equalization is done, the actual tax rates are very close with the primary difference being the cost to service Lewiston debt being higher than Auburn. Because of that higher debt service, Lewiston-side taxpayers would pay a slightly higher rate than Auburn-side taxpayers -- $22.70 compared to $21.38 – until all current debt is retired.
The Commission projects a combined city could save between $2.3 and $4.2 million dollars per year (i.e. 2.5% to 4.4% of current tax levies) and between $23 and $42 million over a 10-year period. What does this mean to the individual taxpayer?
Those savings calculate to $1,900 for the median Lewiston property owner and $1,050 for the median Auburn property owner over that ten-year period. Those savings might be used to reduce taxes, reduce the growth of taxes, fund service improvements, or fund needed investments. Future city councils will decide what to do with any savings.
One thing is clear -- if there is no merger, there will no savings of this magnitude, and taxes will rise more rapidly or services will be reduced.
Currently, Lewiston residents pay a storm water fee. Auburn residents do not. The Commission’s report recommends that a merged city should adopt a storm water fee for everyone. Won’t this reduce the tax savings being projected for Auburn side residents?
How are storm water management costs covered in Auburn today?
Storm water management costs are covered by property taxes, which are assessed on the value of land plus buildings. The costs to manage storm water are not broken out and charged separately.
Once consequence of this is that nonprofits and other organizations that do not pay property taxes do not contribute to the city's costs for storm water management.
How are storm water management costs covered in Lewiston today?
Storm water management costs are not covered by taxes paid by Lewiston property owners. They are funded separately and are assessed on the square footage of impervious surfaces such as roofs, driveways, parking lots, etc.
All property owners share in the cost of dealing with water from rain and snow. Thus, non-profit organizations (e.g., hospitals, colleges, churches) that do not pay property taxes, contribute to these costs.
How are the storm water management fees assessed in Lewiston?
Storm water management fees are based on the square footage of impervious surfaces present on a property. Impervious surfaces determine the run-off generated from a property and the amount of impervious surface is directly correlated to the cost of managing storm water.
Using existing data from the Geographic Information System, the square footage of impervious surfaces is readily available for all properties.
Why did Lewiston shift to a fee structure for storm water management?
Lewiston considers the fee structure to be the most equitable way to fund storm water management because it is based on square footage of impervious surfaces, which is directly correlated to the costs. For example, a property owner with a large commercial building and sizable parking area pays considerably more for storm water management than a single-family homeowner.
The fee structure also provides property tax relief to homeowners because property tax-exempt organizations are contributing to the city’s storm water management costs.
What are the implications of the storm water fee on property tax?
Lewiston shifted to a fee structure for storm water management in 2007. At that time, the $1.9 million in storm water management expense, if paid with property taxes, would have cost $1.27 per $1,000 assessed valuation. A typical single-family home in Lewiston valued at $80,000 would have paid an additional $102 in property taxes for storm water management. With the storm water management fee structure in place, the same home paid $50.
If Lewiston and Auburn merge, will a storm water management fee be introduced in Auburn or will Lewiston shift back to an all-inclusive property tax?
The Charter Commission has taken no position on this issue.
If the voters of both Lewiston and Auburn approve the proposed charter and consolidation agreement in November 2017, there will be a 26-month transition period when this and other issues will be considered. After the merger is finalized on January 1, 2020, a new city council will make decisions on this and other issues.
Whether the funded from property taxes or a separate assessment, the cost to dispose of storm water will continue.