E. FISCAL CAPACITY
During the past four years, property taxes have accounted for an average of 80 percent of total town revenues. Excise taxes, at 7 percent of the total, and intergovernmental transfers (e.g. revenue sharing) at about 3 percent, are the other major sources of revenue. Miscellaneous revenues such as interest and trust funds contribute about 2 percent to the town's budget; charges for services bring in 1.4 percent; and licenses, permits and tax penalties account for the remaining share of 6.6 percent of the budget. Total actual revenues in 2005 (the most recent year for which a state audit is available) were $4,401,319.
In fiscal year 2005, the tax rate was $11.40 on a net valuation of $324,259,240. This was the assessed value established by the Assessor at 100% of assumed market value. This was a result of a re-evaluation that was completed.
Between 1996 and 2001, the largest category of expenditure was education, averaging 60.6% of the town's costs. Other major expenses were public works at 15.1% of the total, general government at 13.7%, public safety at 3.2% and equipment at 2.6%. The remaining 4.6% was divided among human services, recreation, the library, and miscellaneous expenditures. Total expenditures during these five years increased almost 43%; however, the town has no debt or interest expenses.
Of revenues derived from property taxes, an average of 73.7% went to education, 20.7% to municipal government and overlay, and 5.6% to the county. Table A-5 shows a five-year revenue and expenditure analysis for Sebago's. Table A-5.1 shows Sebago’s ten-year Capital Investment Program.
The Town has a history of managing its finances conservatively, and appears to be in sound financial condition. Traditionally, the Town avoids incurring debt when possible, preferring to appropriate money to a reserve fund for a specific capital expense for several years before the expense is anticipated to occur. One effect of this policy is that the Town has ample bonding capacity if unanticipated capital needs appear.
As in most communities, education expenses account for the largest share of the municipal budget. Sebago has a large amount of relatively high-value shorefront property, but also has a large amount of land in tree growth that receives tax credits. This combination of factors, which is fairly unusual, means that the standard state aid formula does not fit Sebago's actual financial situation very well.