Understanding our town’s fiscal position is crucial when planning for the community’s growth and changing needs. This section examines Mount Desert’s fiscal capacity and its ability to fund new and existing services and facilities.
Assessed Valuation, Commitment, and Tax Rate
Examining assessed valuations is one way to track the fiscal health of the community. Assessed valuation is the basis upon which local property taxes are levied. A rising valuation is a sign of fiscal strength – smaller tax rates are needed to raise a given sum of money.
In 2003, our town’s assessed valuation reached $680.7 million, an increase of $119 million since 1992 (Figure 1). This increase has been steady, but valuations have generally increased more rapidly between 1998 and 2002.
A growing tax base (assessed valuations are the basis on which local property taxes are raised) increases the amount of taxes collected for a given tax rate. For example, in 1997 and 1999, Mount Desert’s tax rate was 8.55 mils (Table 1). Between these two years the town’s valuation had increased by $14.5 million. Due to this increasing valuation, commitment (the amount the Town raises from property taxes) increased by $125,000.
 Local commitment, or the amount of property taxes collected to fund local government, for 2003 was $8.27 million (Table 1). This was more than twice the size of the $3.62 million
commitment in 1992 (after adjusting for inflation, commitment increased by 73%).
Commitment increased through the early 1990s before leveling off in the mid-1990s. Since 1999, commitment has increased more rapidly (nearly $3.00 million between 1999 and 2003).
Because commitment has increased at a faster rate than assessed valuation, our tax rate has increased. The tax rate reflects how much of the local valuation is committed in property taxes each year. In 2003, Mount Desert’s local property tax rate was 12.15 mils (a mil is the number of dollars in property tax paid for each $1,000 in assessed valuation). Since 1992, the tax rate has steadily increased from 6.45 mils, with larger increases coming in 2001 and 2002 (Table 1).
Table 1 illustrates the compounding effect of growing local valuations and an increasing tax rate (local valuation divided by commitment equals tax rate).
The full value tax rate is used by the State to adjust for local valuation discrepancies between communities. Despite Mount Desert’s rapid tax increase in recent years, the community has the lowest property taxes of any in the region. (Table 2). This suggests that the amount of money the Town collects in property taxes is relatively small when compared against the town’s relatively large assessed valuation.
Note – full value tax rates do not account for differences in services and facilities. For example, larger and more urban communities tend to have more programs and facilities, thereby increasing the cost of the local government (and vice-versa for more rural communities).
Revenues
Local property taxes (commitment) were the largest source of revenue for Mount Desert in 2003, but nearly 20% of the Town’s $10,213,561 in revenues came from other sources (Table 3). Since 1993, total annual revenues have increased by $5.5 million (or 114%).
Property taxes are the single largest source of revenue for Mount Desert, accounting for more than 80% of annual revenues. Local property taxes totaled $8.2 million in 2003. The amount of property taxes that were raised in 2003 to fund local government have more than doubled since 1993.
Excise tax revenue includes those local taxes paid on cars, boats, and other objects. In 2003, excise taxes totaled nearly $600,000, or 6% of the Town’s total revenues. Since 1993, excise taxes have nearly doubled.
Intergovernmental revenue includes revenues from various federal, state, and local sources. For example, this includes revenues paid to the Town from Acadia National Park, the Otter Creek Treatment Plant, and various assistance/reimbursements from the State for homesteads, tree growth lands, and general assistance. In 2003, these revenues accounted for 1% of the Town’s revenues, or $131,000. Since 1993, these revenue sources have increased by 82%.
Charges for marine services includes revenues earned by the marina, concessions, and mooring fees. In 2003, these revenues accounted for 5% of the Town’s total revenues, or $469,692. Since 1993, these revenues have increased by 60%.
Charges for other services include proceeds earned by the Town through various programs. For example, these include revenues from paid parking, planning/zoning fees, clerk fees, and solid waste collection. In 2003, these accounted for 1% of the Town’s revenues, or $105,600. Since 1993, these revenues have increased by 75%.
Miscellaneous revenues include various other forms of income not mentioned above, such as rental from Adelphia Cable, interest of investments, and the sale of surplus property and equipment. In 2003, these revenues totaled $200,000 (about half of which was from interest on the Town’s investments). These revenues have doubled since 1993.
Transfers and other sources includes municipal revenue sharing and transfers from other accounts. In 2003, these revenues totaled 5% of total revenues, or more than $480,000. Most of this revenue was the result of a $400,000 transfer from the Town’s credit reserve. Since 1993, this form of revenue has increased dramatically.
Expenditures
In 2003, Mount Desert spent more than $9.7 million to provide services and facilities to citizens (Table 4). This is $4.7 million more than in 1993.
Education expenses pay for the town’s public school service at the elementary school and the Mount Desert Island High School. In 2003, Mount Desert paid a total of $4.2 milllion for education (or 43% of the annual budget). Since 1993, education expenses have doubled since 1993. Elementary school expenses have increased by 113% while high school expenses have increased by 152%.
Public Works expenses operate the Town’s public works department. In 2003, these expenses totaled $1.0 million, or 11% of all expenses.
Wastewater Treatment includes operating expenses and debt expenses for the various wastewater treatment plants in the community. In 2003, these expenses totaled $1.0 million, or 11% of total expenses.
Other expenditures pay for everything from compliance expenses/mandates to operating transfers to the various reserve accounts. In 2003 these expenses totaled $870,000, or 9% of total expenses.
Personnel expenses include unemployment compensation, medical insurance, social security/medicare, and other expenses used to maintain the Town’s workforce. In 2003, these expenses accounted for $660,000, or 7% of total expenses.
County taxes totaled $550,000 in 2003, or 6% of total expenses. The amount paid in taxes to the County depends on the relative size of the town’s valuation compared with other towns in the county.
Public safety expenses totaled $580,000, or 6% of the town’s total expenses.
General government accounts for administrative expenses needed to operate the local government. This includes funds for assessing, tax collection, clerk, and other local services. In 2003, these expenses totaled $530,000, or 5% of the total budget.
Marine includes funds used to support the town’s waterfront activities. In 2003, these expenses totaled $171,000, or 2% of the total.
| 
